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Las Palmas authorized Palma to sign a bill of exchange in his (Las Palmas’s) name. The bill reads: "Pay to Madrid or order the sum of Php8 million. Signed, Palma (for and in behalf of Las Palmas)." The bill was drawn on Las Palmas. Madrid indorsed the bill to Barcelona, Barcelona to Valencia, and Valencia to Alicante. May Alicante treat the bill as a promissory note?   a. No, because the instrument is payable to order and has been indorsed several times. b. No, because the instrument is a bill of exchange. c. Yes, because the drawer and drawee are one and the same person. d. Yes, because Palma was only an agent of Las Palmas

Las Palmas authorized Palma to sign a bill of exchange in his (Las Palmas’s) name. The bill reads: "Pay to Madrid or order the sum of Php8 million. Signed, Palma (for and in behalf of Las Palmas)." The bill was drawn on Las Palmas. Madrid indorsed the bill to Barcelona, Barcelona to Valencia, and Valencia to Alicante. May Alicante treat the bill as a promissory note?   a. No, because the instrument is payable to order and has been indorsed several times. b. No, because the instrument is a bill of exchange. c. Yes, because the drawer and drawee are one and the same person. d. Yes, because Palma was only an agent of Las Palmas

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Las Palmas authorized Palma to sign a bill of exchange in his (Las Palmas’s) name. The bill reads: "Pay to Madrid or order the sum of Php8 million. Signed, Palma (for and in behalf of Las Palmas)." The bill was drawn on Las Palmas. Madrid indorsed the bill to Barcelona, Barcelona to Valencia, and Valencia to Alicante. May Alicante treat the bill as a promissory note?
 
a. No, because the instrument is payable to order and has been indorsed several times.
b. No, because the instrument is a bill of exchange.
c. Yes, because the drawer and drawee are one and the same person.
d. Yes, because Palma was only an agent of Las Palmas.
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