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| 1 | |
In a draft instrument, the __________ gives the order, the __________ must obey the order, and the __________ receives the benefit of the order. |
| | A) | Drawee; drawer; payee |
| | B) | Drawer; drawee; payee |
| | C) | Payee; drawer; drawee |
| | D) | Drawee; payee; drawer |
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| 2 | |
A __________ is a special draft that orders the drawee, a bank, to pay a fixed amount of money on demand. |
| | A) | Promissory note |
| | B) | Bearer bond |
| | C) | Order bond |
| | D) | Check |
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| 3 | |
Which of the following is not a characteristic of a traveler's check? |
| | A) | It is payable on demand |
| | B) | It is drawn on or through a bank |
| | C) | It requires a countersignature by a person whose signature appears on the instrument |
| | D) | It is payable at a definite time |
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| 4 | |
A(n) __________ check is a check that is accepted at the bank at which it is drawn. |
| | A) | Conditional |
| | B) | Uncertified |
| | C) | Certified |
| | D) | Qualified |
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| 5 | |
A depositary bank is: |
| | A) | The first bank that receives a check for payment |
| | B) | The bank on which a check is drawn |
| | C) | Any kind of bank, besides the payor bank, that handles a check during the collection process |
| | D) | Any bank, besides the payor bank and depositary bank, to which a check is transferred |
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| 6 | |
A payor bank is: |
| | A) | The first bank that receives a check for payment |
| | B) | The bank on which a check is drawn |
| | C) | Any kind of bank, besides the payor bank, that handles a check during the collection process |
| | D) | Any bank, besides the payor bank and depositary bank, to which a check is transferred |
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| 7 | |
A collecting bank is: |
| | A) | The first bank that receives a check for payment |
| | B) | The bank on which a check is drawn |
| | C) | Any kind of bank, besides the payor bank, that handles a check during the collection process |
| | D) | Any bank, besides the payor bank and depositary bank, to which a check is transferred |
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| 8 | |
An intermediary bank is: |
| | A) | The first bank that receives a check for payment |
| | B) | The bank on which a check is drawn |
| | C) | Any kind of bank, besides the payor bank, that handles a check during the collection process |
| | D) | Any bank, besides the payor bank and depositary bank, to which a check is transferred |
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| 9 | |
Under the "__________" rule, a bank has a duty to pay checks from its customer's account as long as the check is "__________". |
| | A) | Properly payable; appropriately authorized |
| | B) | Properly payable; properly payable |
| | C) | Appropriately authorized; appropriately authorized |
| | D) | Appropriately authorized; properly payable |
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| 10 | |
A written stop payment order is effective for __________. |
| | A) | Fourteen (14) days, and can be extended for another fourteen (14) days |
| | B) | Fourteen (14) days only |
| | C) | Six (6) months, and can be extended for another six (6) months |
| | D) | Six (6) months only |
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