In: Accounting
1. What are the advantages of commercial paper ? Select all that apply
Advantages of Commercail paper
a. saftey
b.transferability
c. convenience
these all above is advantages of commercial paper.
d. verbal is not advantage because commercial paper is not verbal instrument.
2. Which of the follwoing are requirement for a valid negotiable instruments? Select all that apply
b. it must be written
c. it must be an unconditional promise or order to pay
above 2 is valid requirements of a valid negotiable instruments.
a. it must be maild. - it is not valid requirement of commercial paper.
d. it must be payable to more than one person. - This is not valid requirement. A negotiable instrument may be made payable to two or more payee jointly. It is not must that it has to pay more than one person.
3. a drawer is the person who signs a promissory note while maker signs a check or draft
4..Which of the follwing are not true of negotiable instruments? Select all that apply
a. negotiable instrument can be hand written (a negotiable instrument must be hand written)
b. a negotiable instruments may not have an acceleration caluse(a negotiable instrument must have an acceleration clause)
c. a negotiable instrumen can require a condition prior to payment (It must be payble on demand or at definate time)
so all above are not true of negotiable instruments.
d. a bearer instrument may be paid to anyone who has possession of it (In bearer instrument no ownership information is mentioned. The holder is presumed to be owner, and whoever in possession of the instrument is entitled to payment) So this is true of negotiable instrument.
5. One of the parties to a certificate of deposit is always a bank.
The certificate of depsoite is an agreement between the depositor and the bank where a predetermined amount of money is fixed for a specified time . So always one party is a bank.