Question 1

An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________.

Accepted Answer

A)   conditional endorsement
B)   restrictive endorsement
C)   qualified endorsement
D)   special endorsementE) B) and C)
F) C) and D)

Question 2

A(n)  ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank

Accepted Answer

A)   accommodation endorser
B)   holder
C)   assignor
D)   acceptorE) B) and C)
F) C) and D)

Question 3

Which of the following definitions describes an aval of a bill or a note?

Accepted Answer

A)   a person who has physical possession of a bill or note that is payable
B)   a person who signs a bill or note as a surety and comaker
C)   a person who endorses a bill or note as a guarantor of an endorsee
D)   a person who signs a bill or note to lend his or her credit to another partyE) C) and D)
F) A) and B)

Question 4

Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement?

Accepted Answer

A)   "Pay to Elaine, without recourse, [signed] John"
B)   "For collection only, [signed] John"
C)   "Pay to Elaine only, [signed] John"
D)   "Pay to Elaine, agent for John [signed] John"E) A) and D)
F) None of the above

Question 6

Explain the role of the advising bank in a letter of credit transaction.

Accepted Answer

Once a bank issues a letter of credit, i...

Question 7

What features should be present in a bill so that it meets promissory requirements?

Accepted Answer

To be negotiable, a bill or note must (1...

Question 8

A bearer paper is different from an order paper in that a bearer paper ________.

Accepted Answer

A)   cannot be negotiated
B)   is negotiated by endorsement and delivery
C)   is negotiated by delivery alone
D)   is negotiated by endorsement aloneE) A) and B)
F) A) and C)

Question 9

The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n)  ________.

Accepted Answer

A)   deed
B)   allonge
C)   sight bill
D)   time billE) B) and D)
F) A) and B)

Question 10

Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

Accepted Answer

A) True 
 B)False

Question 11

The ________ is the production of an instrument to a party liable to pay on it for that party's acceptance or payment.

Accepted Answer

A)   accommodation of the instrument
B)   presentment of the instrument
C)   issuance of the instrument
D)   endorsement of the instrumentE) B) and C)
F) A) and C)

Question 12

What is an endorsement? What are the different types of endorsements?

Accepted Answer

The act of a payee, drawee, accommodation party, or holder of a negotiable instrument in signing the back of the instrument, with or without qualifying words, to transfer rights in the instrument to another is known as endorsement. An endorsement is required to negotiate a bill or note that is in the form of order paper, and it may optionally be added to bearer paper. Endorsements are signatures, with or without additional statements that are commonly written on the back of the instrument. There are four basic kinds: (1) special endorsements, (2) blank endorsements, (3) qualified endorsements, and (4) restrictive endorsements.

Question 13

The common law requires a note to contain the words "promissory note."

Accepted Answer

A) True 
 B)False

Question 14

The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Accepted Answer

A) True 
 B)False

Question 15

A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods.

Accepted Answer

A)   bill of lading
B)   deed
C)   letter of credit
D)   certificate of depositE) C) and D)
F) A) and B)

Question 16

Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

Accepted Answer

A) True 
 B)False

Question 17

For which of the following types of endorsements is there a difference in endorsee status between the ULB and common law?

Accepted Answer

A)   conditional endorsement
B)   collection endorsement
C)   agency endorsement
D)   endorsement prohibiting further endorsementE) C) and D)
F) A) and C)

Question 18

An order bill is a bill or note that contains a special endorsement as its last endorsement.

Accepted Answer

A) True 
 B)False

Question 19

Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

Accepted Answer

A) True 
 B)False  False

Question 20

What is a bearer paper?

Accepted Answer

Bearer paper is an instrument that either (1) contains on its face an order to pay the bearer or to pay in cash, or (2) contains as its last endorsement a so-called blank endorsement, that is, the signature of the payee or the signature of the last endorsee named in a special endorsement. Bearer paper is negotiated by delivery alone. The use of bearer paper is riskier than the use of order paper. If it is lost or stolen it must still be paid.

Exam 12: Financing

An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________.

Correct Answer
verified

A(n) ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank

Correct Answer
verified

Which of the following definitions describes an aval of a bill or a note?

Correct Answer
verified

Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

Correct Answer
verified

Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement?

Correct Answer
verified

Explain the role of the advising bank in a letter of credit transaction.

Correct Answer
verified
Once a bank issues a letter of credit, i...
View Answer

What features should be present in a bill so that it meets promissory requirements?

Correct Answer
verified
To be negotiable, a bill or note must (1...
View Answer

A bearer paper is different from an order paper in that a bearer paper ________.

Correct Answer
verified

The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n) ________.

Correct Answer
verified

Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

Correct Answer
verified

The ________ is the production of an instrument to a party liable to pay on it for that party's acceptance or payment.

Correct Answer
verified

What is an endorsement? What are the different types of endorsements?

The common law requires a note to contain the words "promissory note."

Correct Answer
verified

The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Correct Answer
verified

A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods.

Correct Answer
verified

Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

Correct Answer
verified

For which of the following types of endorsements is there a difference in endorsee status between the ULB and common law?

Correct Answer
verified

An order bill is a bill or note that contains a special endorsement as its last endorsement.

Correct Answer
verified

Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

Correct Answer
verified
False

What is a bearer paper?

Exam 12: Financing

An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________.

Correct AnswerverifiedShow Answer

A(n) ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank

Correct AnswerverifiedShow Answer

Which of the following definitions describes an aval of a bill or a note?

Correct AnswerverifiedShow Answer

Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

Correct AnswerverifiedShow Answer

Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement?

Correct AnswerverifiedShow Answer

Explain the role of the advising bank in a letter of credit transaction.

Correct AnswerverifiedOnce a bank issues a letter of credit, i...View AnswerShow Answer

What features should be present in a bill so that it meets promissory requirements?

Correct AnswerverifiedTo be negotiable, a bill or note must (1...View AnswerShow Answer

A bearer paper is different from an order paper in that a bearer paper ________.

Correct AnswerverifiedShow Answer

The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n) ________.

Correct AnswerverifiedShow Answer

Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

Correct AnswerverifiedShow Answer

The ________ is the production of an instrument to a party liable to pay on it for that party's acceptance or payment.

Correct AnswerverifiedShow Answer

What is an endorsement? What are the different types of endorsements?

The common law requires a note to contain the words "promissory note."

Correct AnswerverifiedShow Answer

The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Correct AnswerverifiedShow Answer

A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods.

Correct AnswerverifiedShow Answer

Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

Correct AnswerverifiedShow Answer

For which of the following types of endorsements is there a difference in endorsee status between the ULB and common law?

Correct AnswerverifiedShow Answer

An order bill is a bill or note that contains a special endorsement as its last endorsement.

Correct AnswerverifiedShow Answer

Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

Correct AnswerverifiedFalse

What is a bearer paper?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Once a bank issues a letter of credit, i...
View Answer

Correct Answer
verified
To be negotiable, a bill or note must (1...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False