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| 1 | |
Wayne, an employer of Jackson Enterprises, mistakenly issues a check payable to Henry and his wife Alice for work that Henry did for Jackson. Who must indorse this check? |
| | A) | Henry alone who may supply Alice's name. |
| | B) | Henry and Alice. |
| | C) | No one since the check was mistakenly issued. |
| | D) | Way on behalf of Jackson as well as Henry. |
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| 2 | |
Ann pretends to be Anna and obtains payment by check payable to Ann of a debt Norman owed Anna. What person suffers the loss if Ann cashes the check at Local Grocery Store? |
| | A) | Local Grocery |
| | B) | Ann |
| | C) | Anna |
| | D) | Norman |
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| 3 | |
A check is made payable to "Brook and/or Betty." Who must indorse the check? |
| | A) | Brook alone may indorse. |
| | B) | Betty alone may indorse. |
| | C) | Either Brook or Betty alone may indorse. |
| | D) | Both Brook and Betty must indorse. |
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| 4 | |
Bob, husband of Dee, forges Dee's signature on her income tax refund check and deposits the proceeds in their joint checking account at Small Bank. When Small Bank discovers this forgery, it contacts Dee who approves the signature. Does Bob have legal liability? |
| | A) | Yes, since Bob committed conversion in any event. |
| | B) | No, since Dee ratified the signature. |
| | C) | Yes, since Dee may not excuse a crime. |
| | D) | No, since Dee had a joint account with Bob. |
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| 5 | |
Hal cashes his payroll check from Matrix Inc. by endorsing it to Little Bank. When the check is dishonored what must Little Bank do to make Hal liable? |
| | A) | Notify Hal by midnight of the next banking day. |
| | B) | Notify Hal within thirty days. |
| | C) | Notify both Hal and Matrix by midnight of the next banking day. |
| | D) | Notify both Hal and Matrix within thirty days. |
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| 6 | |
John cashes a check issued by Don that was altered by Cindy, who did not indorse, without John's knowledge. John indorsed the check "without recourse" to Diamond Check Cashers. What party has liability to Diamond for the altered amount? |
| | A) | John |
| | B) | Don |
| | C) | Cindy |
| | D) | John, Don, and Cindy |
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| 7 | |
Which of the following statements about the warranties of indorsers is incorrect? |
| | A) | An indorser who receives consideration makes warranties. |
| | B) | There are five warranties made by an indorser. |
| | C) | One warranty is that all signatures are genuine. |
| | D) | There is no warranty that an instrument is irregular. |
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| 8 | |
"Without recourse" is a _____ indorsement. |
| | A) | restrictive |
| | B) | special |
| | C) | conditional |
| | D) | qualified |
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| 9 | |
A holder may _____. |
| | A) | not convert a prior indorsement by writing words next to it |
| | B) | convert a blank special indorsement into a special indorsement |
| | C) | convert a special indorsement into a blank indorsement |
| | D) | convert a special indorsement into a specific indorsement |
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| 10 | |
A blank indorsement makes the instrument a(n) _____ instrument. |
| | A) | bearer |
| | B) | order |
| | C) | both an order and a bearer |
| | D) | altered |
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