Which of the Following Must a Transferee Fulfill in Order

question 2

Multiple Choice

Which of the following must a transferee fulfill in order to be a holder in due course?

• A) Have a valid reason to question the instrument's authenticity
• B) Be able to issue an enquiry into the face value of a negotiable instrument
• C) Should not hold a negotiable instrument
• D) Should accept that the instrument contains an unauthorized signature or has been altered
• E) Should be able to question whether the instrument has been dishonored or not

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Definitions:

Perpetual Inventory System

A perpetual inventory system is a method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Gross Method

An accounting approach to recording purchases at their full invoice amount without deducting any cash discounts offered.

Merchandise Return

The process of a customer returning previously purchased goods to the seller, often due to defects or unsatisfaction, which may result in a refund or replacement.

Gross Method

An accounting method for recording purchases at the total invoice cost without deducting any cash discounts at the time of purchase.