Question 1

A blank indorsement

Accepted Answer

A)  consists only of the signature of the indorser. 
B)  makes the instrument payable to the bearer. 
C)  allows an instrument to be transferred by delivery alone. 
D)  all of these. 
A)  consists only of the signature of the indorser. 
B)  makes the instrument payable to the bearer. 
C)  allows an instrument to be transferred by delivery alone. 
D)  all of these.

Question 2

It is legal for a person to turn a blank indorsement into a special endorsement.

Accepted Answer

A) True 
 B)False

Question 3

What is the significance of becoming the holder of a bearer instrument acquired illegally (e.g. stolen) and then legally having the power to pass the instrument on to an innocent third party?

Accepted Answer

A negotiable instrument payable to beare

Question 4

An indorsement transfers ownership of a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements best describes the effect of a person indorsing a check "without recourse?"

Accepted Answer

A)  The person coverts the check to bearer paper 
B)  Directs payment to a specific person 
C)  The person makes no promise or guarantee of payment on dishonor of the instrument 
D)  The person has no liability to prior indorsers 
A)  The person coverts the check to bearer paper 
B)  Directs payment to a specific person 
C)  The person makes no promise or guarantee of payment on dishonor of the instrument 
D)  The person has no liability to prior indorsers

Question 6

The first transfer of a negotiable instrument to the payee (a holder) by the maker or drawer is called an issue.

Accepted Answer

A) True 
 B)False

Question 7

A(n) ____________________ indorsement should be used if you mail a check to the bank for deposit.

Accepted Answer

The answer of A(n) ____________________ indorsement should be used if...

Question 8

Once a restrictive indorsement is used, the instrument is not negotiable.

Accepted Answer

A) True 
 B)False

Question 9

Blank indorsements turn order instruments into bearer instruments.

Accepted Answer

A) True 
 B)False

Question 10

A bearer instrument is negotiated by delivery alone.

Accepted Answer

A) True 
 B)False

Question 11

Delivering a negotiable instrument to the maker discharges it by cancellation.

Accepted Answer

A) True 
 B)False

Question 12

The signature "David Hopper" on the back of a check is a blank indorsement.

Accepted Answer

A) True 
 B)False

Question 13

A negotiation is defined as

Accepted Answer

A)  an assignment of rights. 
B)  any assignment of an instrument to the indorsee. 
C)  a signature other than that of the indorsee. 
D)  any transfer of an instrument to a holder. 
A)  an assignment of rights. 
B)  any assignment of an instrument to the indorsee. 
C)  a signature other than that of the indorsee. 
D)  any transfer of an instrument to a holder.

Question 14

You did some electrical work for a new neighbor who recently moved in next door. However, you are concerned about the check you received from the neighbor for your services. Frankly, you wonder if the neighbor has money to cover the amount of the check simply because you owe Marlin, a friend money and wish to pass your neighbor's check along to her. When indorsing the check, what can you do to protect yourself if Marlin has trouble collecting from your neighbor?

Accepted Answer

Use a qualified indorsement wh

Question 15

Betsy Carter issued a promissory note payable to the order of Lynn Baylor. What must Baylor do if she wishes to transfer the note to John Victor?

Accepted Answer

Baylor must indorse

Question 16

A blank indorsement can be converted into a

Accepted Answer

A)  restrictive indorsement. 
B)  special indorsement. 
C)  qualified indorsement. 
D)  negotiable instrument. 
A)  restrictive indorsement. 
B)  special indorsement. 
C)  qualified indorsement. 
D)  negotiable instrument.

Question 17

The person to whom a negotiable instrument is transferred is the indorser.

Accepted Answer

A) True 
 B)False

Question 18

Tandom endorsed a check "Jane Tandom." This is a

Accepted Answer

A)  qualified indorsement. 
B)  special indorsement. 
C)  restrictive indorsement. 
D)  blank indorsement. 
A)  qualified indorsement. 
B)  special indorsement. 
C)  restrictive indorsement. 
D)  blank indorsement.

Question 19

An indorsee is the person who receives an indorsed instrument.

Accepted Answer

A) True 
 B)False

Question 20

A check made out to "cash" is considered to be an order instrument.

Accepted Answer

A) True 
 B)False

Exam 20: Issue, Transfer, Indorsement, and Discharge of Negotiable Instruments

A blank indorsement

It is legal for a person to turn a blank indorsement into a special endorsement.

What is the significance of becoming the holder of a bearer instrument acquired illegally (e.g. stolen) and then legally having the power to pass the instrument on to an innocent third party?

An indorsement transfers ownership of a negotiable instrument.

Which of the following statements best describes the effect of a person indorsing a check "without recourse?"

The first transfer of a negotiable instrument to the payee (a holder) by the maker or drawer is called an issue.

A(n) ____________________ indorsement should be used if you mail a check to the bank for deposit.

Once a restrictive indorsement is used, the instrument is not negotiable.

Blank indorsements turn order instruments into bearer instruments.

A bearer instrument is negotiated by delivery alone.

Delivering a negotiable instrument to the maker discharges it by cancellation.

The signature "David Hopper" on the back of a check is a blank indorsement.

A negotiation is defined as

Betsy Carter issued a promissory note payable to the order of Lynn Baylor. What must Baylor do if she wishes to transfer the note to John Victor?

A blank indorsement can be converted into a

The person to whom a negotiable instrument is transferred is the indorser.

Tandom endorsed a check "Jane Tandom." This is a

An indorsee is the person who receives an indorsed instrument.

A check made out to "cash" is considered to be an order instrument.

Foundations of Law and the Role of Ethics in Business

The Legal System in the United States and Its Constitutional Foundation

Personal, Business, and Cyber Crimes and the American Criminal Justice System

Tort Law: Traditional Torts and Cyber Torts

Litigation and Alternatives for Settling Civil Disputes

Contract Law: a Beginning

Agreement: Offer and Acceptance

Consideration

Capacity

Legality

Memorialize Contracts in Writingstatute of Frauds

Transfer of Contract Rights and Duties

The Termination of Contracts: Discharge

The Termination of Contracts: Breach of Contract

Formation of Sales and Lease Contracts

The Sales Contract: Transfer of Title and Risk of Loss

The Sales Contract: Performance, Breach, and Remedies for Breach

Product Liability Law

Nature and Types of Negotiable Instruments

Rights and Duties of Parties

Checks and the Banking System in the Twenty-First Century

Employer-Employee Relationship

Principal-Agent Relationship

Principal-Agent, Employer-Employee, and Third-Party Relationships

Sole Proprietorships, Partnerships, and Limited Liability Organizations

Corporations and Franchising

Government Regulation of Business

Basic Legal Concepts of Property

Renting Real Property

Buying and Selling Real Property

Nature and Types of Bailments

Wills, Intestacy, and Estate Planning

Protecting the Consumer and the Taxpayer

Protecting the Borrower

Protecting the Creditor

Property, Casualty and Automobile Insurance

Personal Insurance

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