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Banking & Fin - Ch 6
Banking & Finance - Negotiable Instruments
| Question | Answer |
|---|---|
| Transferable | Negotiable |
| A written order or promise to pay a sum of money either to a specified party or person who holds it | Negotiable Instrument |
| An order signed by one party that is addressed to another party directing the drawee to pay someone the amount indicated | Draft |
| A negotiable and unconditional wrttien order addressed by one party to another | Bill of Exchange |
| A written promise to pay at a fixed or determinable future time or sum of money to a specified individual | Promissory Note |
| Legal requirements every check is required to meet (Written, Signed, Unconditional Promise, Sum Certain, Payable on Demand, Words of Negotiation) | Elements of Negotiability |
| The person of financial institution that acquires a check or promissory note received in good faith as payment and who is entitled to payment by the drawee of the check | Holder in Due Course |
| Signature of the holder, least restrictive | Blank Endorsement |
| Limits the use of the instrument to a means specified by the endorser, For Deposit Only | Restrictive Endorsement |
| Transfers the check to another party, limits neither the transferability nor further negotiability, Pay To The Order of | Full (Special) Endorsement |
| An attempt to limit the liability of endorser without limiting instruments further negotiability, Pay to The Order of_____ without recourse | Qualified Endorsement |
| When 2 banks count the same funds | Float |
| A 9-digit number that identifies the bank that holds the checking account and is responsible for payment | Transit (Routing) Number |
| A check written on account that does not have adequate funds to cover it and is returned unpaid | Returned Check |
| A consumer purchases but must pay the account in full at the end of the month | Charge Card |
| Alow consumers to pay all of part of their bills each month and finance the unpaid balance | Credit Card |
| Commonly used at ATMs, can be used to perform most banking functions, requires a PIN number | Cash Card |
| Transfer money from a person's designated account to the account of the retailer (POS) | Debit Card |
| Credit, Debit, or other types of cards with embedded microchips, the microchip stores values and uses embedded logic to change values | Smart Card |
| Online System that allow consumers to pay each other directly for a prodcut | Person to person payment |
| Uses a transponder to convey identifying information | Radio Frequency Identification |
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mryan396
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