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To obtain his business license, Alan writes a check to the

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1. To obtain his business license, Alan writes a check to the appropriate state agency. Alan is;a. the drawee.;b. the drawer.;c. the indorser.;d. the payee.;Answer A;2. Alpha Company issues a trade acceptance with itself and Beta Company as parties. A trade acceptance is;a. a draft.;b. an order to accept delivery of money.;c. a promise to accept delivery of goods.;d. a promise to deliver goods.;Answer A;3. Doug writes a check for $100 payable to Eve on his account at First State Bank. The bank is;a. the bearer.;b. the drawee.;c. the drawer.;d. the holder.;Answer C;4. To pay for improvements to Diners Cafe, Earl executes a negotiable instrument in favor of First County Bank. They are the only parties to the instrument. A negotiable instrument that has only two parties is;a. a bank draft.;b. a check.;c. an indorsement.;d. a promissory note.;5. Finest Business Company issues an instrument in favor of General Supplies, Inc. For the instrument to be negotiable, it need not;a. be an unconditional promise or order to pay.;b. be payable on demand or at a specific time.;c. be signed by Finest Business Company.;d. recite the consideration given in exchange for a promise to pay.;6. Ellen owes $6,000 in unpaid taxes. On the back of an old shirt, she executes an instrument for that amount that otherwise meets the requirements for negotiability. This instrument is likely;a. negotiable.;b. nonnegotiable, because an instrument must be on paper.;c. nonnegotiable, because a shirt is not sufficiently permanent.;d. nonnegotiable, because the government does not appreciate it.;7. Jim owes $5,000 in unpaid taxes. On the flank of his quarter horse, he executes an instrument for that amount that otherwise meets the requirements for negotiability. This instrument is likely;a. negotiable.;b. nonnegotiable, because an instrument must be on paper.;c. nonnegotiable, because a quarter horse is not freely transferable.;d. nonnegotiable, because the government does not appreciate it.;8. Don, the chief executive officer of Epsilon Products, Inc., signs an instrument by placing his thumbprint on it. This instrument is;a. negotiable.;b. nonnegotiable, because a thumbprint does not state the signer's name.;c. nonnegotiable, because a thumbprint implies a lack of binding intent.;d. nonnegotiable, because a thumbprint is not a signature.;9. Karen writes on a piece of paper, "I owe you $600," signs it, and gives it to Lou. This instrument is;a. negotiable.;b. nonnegotiable, because it does not include an express promise to pay.;c. nonnegotiable, because it does not recite any consideration.;d. nonnegotiable, because it does not state any conditions to payment.;10. Ben, the owner of Construction Contractors, Inc., signs an instrument that includes the phrase "as per contract." This instrument is;a. negotiable.;b. nonnegotiable, because information about the contract must be obtained from another source.;c. nonnegotiable, because it states an express condition to payment.;d. nonnegotiable, because the terms of the contract are not clear.

 

Paper#34421 | Written in 18-Jul-2015

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