NEGOTIABLE INSTRUMENT

When a customer draws a cheque on his banker, the banker is known as

• the collecting banker

• the paying banker

• the customer banker

A cheque becomes a stale cheque when it has been in circulation for more than six months.

• True

• False

The following are the characteristics of a cheque EXCEPT

• it is drawn on a banker

• it is signed by the drawer

• it is a conditional order in writing

• it orders the banker to pay a sum certain in money or on demand

Negotiable instrument means

• cheque

• promissory notes

• bills of exchange

• All of the above

An instrument in writing containing an unconditional order signed by the maker, directing the certain person to pay certain some of money only to or order of a certain person is called as

• Cheque

• Promissory note

• Bill of exchange

A negotiable instrument may be oral or written.

• True

• False

The act of placing one's signature on an instrument, usually on the back, to transfer it to another:

• drawee

• schedule

• negotiation

• endorsement

A distinctive mark, characteristic, indicating identity:

• signature

• substitute

• reconcile

• assignment

To be negotiable, a promissory note or a certificate of deposit must contain a conditional promise to pay money.

• True

• False

Negotiable instruments must be payable _____.

• never

• at issuance

• on demand

• definite time