Exam 20: Nature of Negotiable Instruments

A written order by one person directing another to pay a sum of money to a third person is known as a(n).

The act of transferring ownership of commercial paper to another party, is called .

Which of the following is true of automated teller machines?

How does negotiation differ from assignment?

​ Widespread use of instruments of credit appeared as international trade began to flourish in the wake of the Crusades.

Transferranceis the act of transferring ownership of a negotiable instrument to another party.

Explain preauthorized debits and credits.

A holder who takes a negotiable instrument in good faith and for value is a holder in due course.

The person who executes a promissory note is called the .

Electronic fund transfers that begin at retailers when consumers want to pay for goods or services with debit cards are called point-of-sale systems.

Negotiable instruments have replaced the instruments of collection which existed under the law merchant.

Checks and trade acceptances are special types of promissory notes.

The person who is ordered to pay a draft is called the .

The maker executes a note by signing on the back of the instrument.

are writings drawn in a special form that can be transferred from person to person as a substitute for money or as an instrument of credit. ​

If commercial paper is made payable to whoever has possession of it, it is called order paper.

Generally, a transfer initiated by a telephone call between a bank employee and a customer is an example of an electronic fund transfer.

Under the Electronic Fund Transfer Act, a customer's liability for an unauthorized EFT can be limited to $50.

A drawee who takes responsibility for paying a draft is called the acceptor.

A system of shortening the trip a bill of exchange makes from the payee to the drawee bank and then to the drawer is called .