Negotiable Instruments - Explained

Negotiable Instruments - Explained

Assessment

Interactive Video

Business, Social Studies

University

Practice Problem

Hard

Created by

Wayground Content

FREE Resource

A negotiable instrument is a commercial document that must be in writing, signed, and contain an unconditional promise or order to pay a fixed amount of money. It should be payable on demand or at a specified time and can be payable to a specific person or bearer. Common types include drafts, checks, promissory notes, and certificates of deposit.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a key requirement for a document to be considered a negotiable instrument?

It must be in writing and signed.

It must be a digital document.

It must be a government-issued document.

It must be verbal.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does 'payable on demand' mean in the context of negotiable instruments?

Payment is made only after a year.

Payment is made only to the government.

Payment is made at any time upon request.

Payment is made only on weekends.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the difference between 'payable to order' and 'payable to bearer'?

'Payable to order' is for a specific person, while 'payable to bearer' is for anyone holding the instrument.

'Payable to order' is for banks only, while 'payable to bearer' is for individuals.

'Payable to order' requires a signature, while 'payable to bearer' does not.

'Payable to order' is for international transactions, while 'payable to bearer' is for domestic transactions.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is an example of a negotiable instrument?

A grocery list

A verbal agreement

A promissory note

A business card

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a check considered in terms of negotiable instruments?

A verbal promise

A digital currency

A non-negotiable document

A type of draft or order to pay

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