Merry draws a check payable to "Cash" and presents it to National Bank for payment. This instrument is
A) a bearer instrument.
B) an order instrument.
C) valid but nonnegotiable.
D) void.

Question

Quizplus · Accepted Answer

A check payable to "Cash" is a bearer instrument, which means it can be transferred by delivery and can be freely negotiated by whoever has possession of the instrument. It is not an order instrument because it does not identify a specific payee. It is also not necessarily nonnegotiable, as negotiability depends on other factors such as the wording and terms of the instrument. It is valid as long as it meets the requirements for a check, but it may be subject to certain limitations or restrictions depending on the circumstances. It is not void unless there is a defect or irregularity that renders it ineffective as a negotiable instrument.

Merry Draws a Check Payable to "Cash" and Presents It