Question 1

The Uniform Commercial Code does not require an allonge to be attached to an instrument.

Accepted Answer

A) True 
 B)False

Question 2

Parties can be discharged from an obligation by a discharge of their debts in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 3

James wants to indorse a check to Janice, but wishes to rid himself from all further liabilities. Which of the following types of indorsements is James likely to use in this case?

Accepted Answer

A)  Special indorsement
B)  Blank indorsement
C)  Restrictive indorsement
D)  Qualified indorsementE) B) and C)
F) A) and D) D

Question 4

Which of the following is true regarding the negotiator of bearer paper?

Accepted Answer

A)  The negotiator is not liable to the immediate transferee as a warrantor of the genuineness of the instrument.
B)  One who negotiates a bearer instrument by delivery alone does not guarantee payment.
C)  The negotiator must indorse a bearer paper when he negotiates it.
D)  The mere delivery by the negotiator of a bearer paper does not change title.E) C) and D)
F) None of the above

Question 5

Delivery of a bearer instrument is sufficient to pass title.

Accepted Answer

A) True 
 B)False

Question 6

is a unilateral act of a holder of an instrument, usually without consideration, whereby the holder gives up rights on the instrument.

Accepted Answer

A)  Refutation
B)  Cancellation
C)  Repudiation
D)  RenunciationE) None of the above
F) A) and D)

Question 7

The trailing edge is the right side of a check when looking at it from the front.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following best describes a restrictive indorsement?

Accepted Answer

A)  It is an indorsement that has the effect of qualifying, thus limiting, the liability of the indorser.
B)  It is an indorsement that attempts to prevent the use of the instrument for anything except the stated use.
C)  It is an indorsement that designates the particular person to whom payment should be made.
D)  It is an indorsement having no words other than the name of the indorser.E) A) and C)
F) None of the above

Question 9

A(n) is a signature on the back of an instrument along with any directions or limitations regarding use of or liability for the instrument. ​

Accepted Answer

A)  authorization
B)  renunciation
C)  indorsement
D)  endorsementE) All of the above
F) B) and C)

Question 10

An instrument made payable to more than one person is not negotiable.

Accepted Answer

A) True 
 B)False

Question 11

Where should a check be indorsed?

Accepted Answer

A)  on the back along the trailing edge
B)  underneath the drawer's signature
C)  anywhere there is room on the instrument
D)  on a paper attached to the instrumentE) A) and D)
F) B) and C) A

Question 12

When a negotiable instrument is lost, this automatically discharges the obligation of the holder.

Accepted Answer

A) True 
 B)False

Question 13

Explain liabilities for payment of instrument

Accepted Answer

By making an indorsement, an indorser, w...

Question 14

A cancellation made by mistake is not effective.

Accepted Answer

A) True 
 B)False

Question 15

A qualified indorsermakes no warranties regarding the instrument.

Accepted Answer

A) True 
 B)False

Question 16

The warranty liability of a qualified indorser is the same as that of an unqualified indorser.

Accepted Answer

A) True 
 B)False

Question 17

For what does an indorser of a negotiable instrument become liable?

Accepted Answer

A)  payment of the face amount and certain warranties
B)  stated interest payable from the date of the indorsement
C)  nothing; only the maker of an instrument is liable
D)  any amounts not paid by the indorser's own bankE) B) and D)
F) B) and C)

Question 18

A indorsement designates the particular person to whom payment should be made.

Accepted Answer

A)  depository
B)  blank
C)  special
D)  restrictiveE) A) and B)
F) B) and C)

Question 19

A depository bank receiving a check with a restrictive indorsement, such as "for deposit " must always honor the restriction.

Accepted Answer

A) True 
 B)False  True

Question 20

A special endorsement is one having no words other than the name of the indorser.

Accepted Answer

A) True 
 B)False

Exam 23: Negotiation and Discharge

The Uniform Commercial Code does not require an allonge to be attached to an instrument.

Correct AnswerverifiedShow Answer

Parties can be discharged from an obligation by a discharge of their debts in bankruptcy.

Correct AnswerverifiedShow Answer

James wants to indorse a check to Janice, but wishes to rid himself from all further liabilities. Which of the following types of indorsements is James likely to use in this case?

Correct AnswerverifiedD

Which of the following is true regarding the negotiator of bearer paper?

Correct AnswerverifiedShow Answer

Delivery of a bearer instrument is sufficient to pass title.

Correct AnswerverifiedShow Answer

is a unilateral act of a holder of an instrument, usually without consideration, whereby the holder gives up rights on the instrument.

Correct AnswerverifiedShow Answer

The trailing edge is the right side of a check when looking at it from the front.

Correct AnswerverifiedShow Answer

Which of the following best describes a restrictive indorsement?

Correct AnswerverifiedShow Answer

A(n) is a signature on the back of an instrument along with any directions or limitations regarding use of or liability for the instrument. ​

Correct AnswerverifiedShow Answer

An instrument made payable to more than one person is not negotiable.

Correct AnswerverifiedShow Answer

Where should a check be indorsed?

Correct AnswerverifiedA

When a negotiable instrument is lost, this automatically discharges the obligation of the holder.

Correct AnswerverifiedShow Answer

Explain liabilities for payment of instrument

Correct AnswerverifiedBy making an indorsement, an indorser, w...View AnswerShow Answer

A cancellation made by mistake is not effective.

Correct AnswerverifiedShow Answer

A qualified indorsermakes no warranties regarding the instrument.

Correct AnswerverifiedShow Answer

The warranty liability of a qualified indorser is the same as that of an unqualified indorser.

Correct AnswerverifiedShow Answer

For what does an indorser of a negotiable instrument become liable?

Correct AnswerverifiedShow Answer

A indorsement designates the particular person to whom payment should be made.

Correct AnswerverifiedShow Answer

A depository bank receiving a check with a restrictive indorsement, such as "for deposit " must always honor the restriction.

Correct AnswerverifiedTrue

A special endorsement is one having no words other than the name of the indorser.

Correct AnswerverifiedShow Answer

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D

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A(n) is a signature on the back of an instrument along with any directions or limitations regarding use of or liability for the instrument.

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A

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By making an indorsement, an indorser, w...
View Answer

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True

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