Exam 3 Flashcards
A check that a bank draws on its own funds and is signed by a responsible bank official is called
cashier’s check
The bank or other financial institution in which a depositor has money on account and which is ordered to comply with the depositor’s order to pay is called the ______; the depositor who has signed the order to pay is called the _____; and the party who is instructed to receive payment on the order to pay is called the _______.
drawee, drawer, payee
Notes, checks, and other commercial paper which may be transferred to another party through the act of endorsement are called
negotiable
Writing “John Doe” on the back of a check is an example of a _______; and writing “For Deposit Only, John Doe” is an example of______.
blank endorsement, restrictive endorsement
Which of the following is not a type of endorsement?
- blank endorsement
- warrantied endorsement
- qualified endorsement
- special endorsement
warrantied endorsement
The bank or other financial institution in which a depositor has money and which is ordered to make payment from the depositor’s account to a named party is called the____
drawee
The party who is directed to receive payment on a promissory note is called the
payee
The party who signs a check or bank draft ordering payment to be made from funds which she/he has on deposit at a financial institution is called the
drawer
The party who executes the promissory note and who promises to pay the borrowed money is referred to as the
maker
The party who, as holder, payee, or bearer, signs ones name on the back of a negotiable instrument is called a/an
endorser
A draft drawn on a bank and payable on demand
check
The signature of the payee or other holder on the back of a check is called a/an
endorsement
Notes, checks, and other commercial paper which may be transferred to another party through endorsement are called
negotiable
The most important statute in the area of business law is the
Uniform Commercial Code
A person in possession of commercial paper who is also known as an “innocent purchaser” is called a/an
holder in due course
A contract which is formed between consignor and a carrier is called
bill of lading
An endorsement that said “For Deposit Only” would be an example of a/an ________ endorsement.
restrictive
A written order where one party instructs another party to pay a third party a certain sum in money from the account of the first party upon demand or at a definite time is called a
draft
A written promise made by a person or business to pay a certain sum in money to another party at a specified or determinable period of time is called a
promissory note
Which of the following is not considered a draft?
- traveler’s check
- certified check
- certificate of deposit
- voucher check
certificate of deposit
An unconditional written order or promise to pay money is one classification of
commercial paper
A bailment which benefits only one of the parties is called
sole benefit bailment
In a bailment relationship, the party who has title to the goods, but not possession, is called the
bailor
A bailment relationship which benefits both parties involved is called a/an
mutual bailment
The transfer of possession, but not title, of personal property from one party to another on the condition that the identical property will be returned is called a/an
bailment
In a bailment, the party who has possession but not title is called
bailee
Which of the following is NOT TRUE of bailed goods?
- bailee can sell the goods
- bailee must take reasonable care of the goods
- bailee must return the goods to bailor
- bailor retains title to the goods
bailee can sell the goods
A contract which is formed between a consignor and a shipper is called a/an
bill of lading
The funeral director who receives photographs from a family is the
bailee
A person who transports goods or persons for a fee, and can be selective as to their customer is what kind of carrier?
private
A carrier that transports goods or persons for a fee for all who apply for the services, and without discrimination, is what type of carrier?
common
A person who transports goods or persons for a fee only under special instances and arrangements is called a _______ carrier.
private
A funeral home is best categorized as being what type of carrier?
private carrier
When a bailment relationship benefits only the person who has title but NOT physical possession of the property involved, this is a bailment for the sole benefit of the
bailor
A bailment relationship which benefits both parties involved is called a/an
mutual bailment
The generic term for one who is engaged in the business of transporting goods, persons, or both, for a fee, is the definition of
carrier
In a bailment relationship, the party who has title to the goods, but NOT possession, is called the
bailor
You have just finalized arrangements for the funeral of Mr. Smith. Mrs. Smith is going to pay for a portion of the funeral by signing over the proceeds of a life insurance policy to the funeral home. For the balance not covered by the insurance funds she is going to write a check from her bank account payable to the funeral home.
In relation to the check Mrs. Smith is the:
drawer
In relation to the check the funeral home would be the
payee
In relation to the check the bank is the
drawee
