FIN 240 Chapter Notes - Chapter 25: Negotiable Instrument, Promissory Note, Financial Institution
Document Summary
Four types of negotiable instruments: drafts, checks, notes, and certificates of deposit. Orders to pay (drafts and checks) and promises to pay (promissory notes and cds) Payable immediately after it issued and thereafter for a reasonable period of time. Issue - first delivery of an instrument by the maker or drawer for the purpose of giving rights on the instrument to any person. Time instrument - payable at a future date. Draft - unconditional written order that involves three parties. Party creating the draft orders another party to pay money, usually to a third party. Drawee - party that is ordered to pay a draft. Payee - person to whom an instrument is made payable. Time draft - payable at a definite future time. Sight draft - payable on sight, when it is presented to the drawee for payment. Acceptance - drawee"s written promise to pay the draft when it comes due.
