Business and Personal Law

Chapter 10: Banking and Negotiable Instruments

Self Check Answers

Section 10.1

1. A note is a promise to pay money; a draft is an order to a third party to pay money.
2. A signature may be any mark placed on the instrument with the intent to be a signature. The signature on a check, however, should match the signature card on file with the bank.
3. An indorsement is the act of placing one's signature on an instrument, usually on the back, to transfer it to another.

Section 10.2

1. Deposit money in the bank and sign a signature card.
2. Compare the check register balance with the bank statement balance to make sure they agree.
3. Sign your name in ink the way it appears on the signature card. Never sign a blank check or change a check.