Asked by Le'Aisha Marshall on Apr 30, 2024
Verified
Hot Dress.Doreen writes a check for a dress to Hot Dresses,Inc.,a small specialty shop owned primarily by Betty.Betty was getting ready to go on an extended European vacation and temporarily closed the shop the day after the dress sale to Doreen.When Betty returned,she had a number of other things to do and did not take Doreen's check and some other checks to the bank for three months.Betty was independently wealthy and only ran the shop as a hobby,so she had not been in need of funds.When Betty finally took Doreen's check to the bank,Betty requested that her bank,ABC Bank,deposit the check into her account.When ABC Bank,however,requested payment from Doreen's bank,XYZ Bank,the check was dishonored because of insufficient funds in Doreen's account.Although Betty did not particularly need the funds,she did not like to feel as if she had been cheated; therefore,she demanded that Doreen make the check good.Which of the following parties is the drawee of the check Doreen presented to Hot Dresses,Inc.?
A) Doreen
B) Hot Dresses,Inc.
C) Betty,because she owns Hot Dresses,Inc.
D) Doreen's bank
E) Betty's bank
Drawee
The party that must obey an order. In the context of banking, the drawee is the bank that must pay the funds ordered by a customer’s check.
Negotiable Instrument
A written document guaranteeing the payment of a specific amount of money to a specified person, which can be transferred by endorsement or delivery.
Dishonored
A term used to describe a financial instrument, such as a check or promissory note, that has been refused acceptance or payment.
- Comprehend the functions and explanations of entities participating in negotiable instruments such as the drawer, drawee, holder, among others.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
D
Explanation :
A drawer is a person who signs as a party ordering the payment of an instrument,while a drawee is the party the drawer orders to pay the instrument.For example,if you write a check from your bank account that is payable to the electric company,you are the drawer of the check,the bank is the drawee,and the electric company is the holder of the check.
Learning Objectives
- Comprehend the functions and explanations of entities participating in negotiable instruments such as the drawer, drawee, holder, among others.