Chapter 6 : Negotiable Instruments (Test)

The most common form of negotiable instrument is a promissory note.

• True

• False

A check must be written on paper in order to be legal.

• True

• False

Which of the following features of a check indicates who is to receive the funds?

• the bearer

• the signature

• the payee

• the memo

Which of the following is NOT an element of negotiability?

• must contain a signature

• must be written

• must be payable on demand

• must state the amount to be paid

Which of the following largely eliminated the wide variation of legal regulation from the country's payments system?

• Federal Reserve Act of 1913

• Uniform Commercial Code of 1958

• National Banking Act of 1864

• Expedited Funds Availability Act of 1987

Marisol has written a $500 check to Stephen, but she only has $300 in her account and it is returned unpaid to Stephen. Marisol has written a

• floating check

• promissory note

• postdated check

• bounced check

Last year, Karl paid 55 of his bills by check; he paid 172 electronically. What percentage of his bills did Karl pay by writing a check?

• 3.13%

• 24.2%

• 32.0%

• 51.3%

Which of the following is not a type of float check?

• malfunction

• transportation

• holdover

• layover

Which of the following requires a consumer to pay the account in full at the end of the month?

• debit card

• charge card

• credit card

• cash card

Which of the following is a reason that we have various types of payment options?

• Technology advancement

• Reduction in money supply

• Entrepreneurial spirit

• Recession