Business Law Final Exam Review2

A written promise to pay money to another person is called a

• draft.

• note.

• certificate of deposit.

• bill of lading.

A draft that is not payable until a particular period of time has passed is called a(n)

• time draft.

• accepted draft.

• sight draft.

• immediate draft.

The person money is promised to in a promissory note is the

• drawer.

• drawee.

• payer.

• payee.

A check that is more than six months old is a

• void check.

• stale check.

• voidable check.

• bad check.

Negotiability allows for the transferee to become a holder, while assignability allows for the

• transferee to avoid liability for errors made as the instrument is transferred.

• instrument to be transferred to someone else without the transferee becoming a holder.

• transferee to obtain legal indorsements in a timely fashion.

• instrument to be void of dates and controlling words.

In order to be negotiable instruments must

• be made orally or in writing.

• be unconditional.

• be electronic.

• not have a definite time they are due.

The Check21 Act (enables digital checks) allows for an electronic signature to replace the original signature and a

• substitute check.

• quick reconciliation process of your checking account.

• stop-payment order as needed.

• direct withdrawal from your checking account when requested.

When security interest is on inventory, the security interest attaches to

• all the inventory including any new inventory coming into the business.

• all of the inventory owned at the time of the attachment.

• a percentage of all the new inventory coming into a business.

• a percentage of all the inventory owned at the time of the attachment.

The fee creditors charge for lending money or extending credit is called

• open-end credit.

• closed-end credit.

• interest.

• collateral.

If unauthorized charges are made on a credit card before the issuing company is notified, the cardholder is liable for up to

• $25.

• $50.

• $100.

• $500.