When an Instrument Fails to Meet the Technical Requirements Necessary

question 15

Multiple Choice

When an instrument fails to meet the technical requirements necessary to qualify as a negotiable instrument, which of the following statements is true?

• A) The instrument is still enforced as a negotiable instrument if it has been transferred to a holder in due course.
• B) The instrument is still enforced as a negotiable instrument if it has been accepted by a bank.
• C) The instrument is still enforced as a negotiable instrument if the holder can establish detrimental reliance based on a reasonable belief that the instrument qualified as a negotiable instrument.
• D) The instrument may qualify as an enforceable contract.
• E) The instrument is null and void and of no use to the holder.

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Definitions:

Revenue Recognition

The accounting principle that dictates the specific conditions under which revenue is recognized and recorded in the financial statements.

Right Of Return

A policy allowing customers to return purchased goods under certain conditions, often within a specific time frame.

Revenue Recognition

The accounting principle that dictates when a company should acknowledge income, typically when a product or service has been delivered or rendered.

Right Of Return

A policy that allows customers to return purchased goods under specified conditions.