Asked by Nicole Nothstine on Jul 17, 2024
Verified
Which of the following is true regarding parties who are related to an order?
A) A drawer, payee, and drawee are all related to an order.
B) A payee and drawer are related to an order, but a drawee is not.
C) A drawee and payee are related to an order, but a drawer is not.
D) A payee is related to an order, but a drawer and a drawee are not.
E) A drawer and a drawee are related to an order, but a payee is not.
Drawer
The party that writes an order, or the person who writes a check.
Payee
The party that receives the benefit of an order (check, etc.).
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.
- Acquire knowledge on the concepts of draft, drawer, drawee, and payee concerning negotiable instruments.
Verified Answer
LH
Le Huu Loi HE141140Jul 18, 2024
Final Answer :
A
Explanation :
In the context of financial orders, such as checks or drafts, the drawer is the party that issues the order, the payee is the party that receives the payment, and the drawee is the entity (often a bank) that is ordered to pay the amount. Therefore, all three parties are related to an order.
Learning Objectives
- Acquire knowledge on the concepts of draft, drawer, drawee, and payee concerning negotiable instruments.