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COMMERCIAL DOCUMENTS (POSTAL MONEY ORDER (DEFINITION:
It is purchased at…
COMMERCIAL DOCUMENTS
POSTAL MONEY ORDER
DEFINITION:
It is purchased at a post office and is payable at another post office to the named recipient.
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IS IT NEGOTIABLE OR NON-NEGOTIABLE?
Postal money order is not a negotiable instrument because it is governed by postal rules and regulation and it may only be negotiated once. In short, it cannot be pass to one another.
QUEDAN
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FUNCTION
It is a warehouse receipt wherein the farmers can now loan from QGFB accredited banks to finance its new planting season. When palay prices go up, the farmers can now sell its stored commodity, realize a better income and pay its loan with the bank.
IS IT NEGOTIABLE OR NON NEGOTIABLE?
Quedan are use as negotiable instrument in sugar trading in the Philippines.
WAREHOUSE RECEIPTS
IS IT NEGOTIABLE OR NON NEGOTIABLE?
Warehouse receipt can be both negotiable and non negotiable. It is negotiable if it may be used in future transactions as collateral in loans or other credit transactions. It is non negotiable if there is only a particular entity to deliver the product.
FUNCTION
The receipt can pass from one owner to the other owner without any delivering the product itself. The new owner will be the one who continues to store the goods in the warehouse.
DEFINITION
Warehouse receipt is a type of document as proof of ownership of a product which is stored in a particular warehouse. The receipt represents the title to the goods.
LETTER OF CREDIT
DEFINITION
A letter of credit is a letter from a bank guaranteeing a seller will receive payment from the buyer in the correct amount and on time.
FUNCTION
Letter of credit is a key financial tool for a small business, because there are a variety of ways to get paid by customers and vendor.
IS IT NEGOTIABLE OR NON NEGOTIABLE?
It is typically a negotiable instrument; the issuing bank pays the beneficiary or any bank nominated by the beneficiary.
BILL OF LADING
DEFINITION
A bill of lading (BL or BoL) is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried.
FUNCTION
It is a document of title, permitting the sale of goods in transit and the raising of financial credit.
IS IT NEGOTIABLE OR NON NEGOTIABLE?
The bill of lading is not a negotiable instrument which is able to pass a good title to a bona fide transferee, regardless of the title of the transferor.
TREASURY WARRANT
DEFINITION
Treasury warrant is an order in the form of a check. It is through treasury warrants that government disbursements are paid. With the treasury warrant, a drawer authorizes someone to pay a particular sum of money to another.
FUNCTION
A treasury warrant is an authorization that a payment be made from a public treasury, usually in the form of a check. Government disbursements are paid with treasury warrants.
IS IT NEGOTIABLE OR NON NEGOTIABLE?
It is not negotiable because a treasury warrant "payable from the appropriation for food administration," is actually an order for payment out of "a particular fund," and is not unconditional, and does not fulfill one of the essential requirements of a negotiable instrument.
DOCK OF WARRANT
DEFINITION
A dock warrant is a document issued by a dock company or dock owner stating that certain good mentioned in the document are brought to the dock warehouse for loading and are deliverable to the person named therein or to his assigns when indorsed.
FUNCTION
A dock authorities issues to the importer a document called dock warrant which describes the goods and mention the date when the storagement begins to accrue.
Is it negotiable or non-negotiable, why?
A dock warrant is a negotiable instrument because the goods it represents can be transferred by mere endorsement or delivery.
CERTIFICATE OF STOCK
DEFINITION
Represents a legal interest and ownership in a company’s common stock and its related stockholder rights
FUNCTION
The document certifies registered ownership of shares from a particular date. Share certificates were required for proof of entitlement to dividends.
IS IT NEGOTIABLE OR NON NEGOTIABLE
Stock certificate is not negotiable because the holder thereof takes it without prejudice to such rights or defenses as the registered owners or transferor’s creditor may have under the law, except insofar as such rights or defenses are subject to the limitations imposed by the principles governing estoppel.
CERTIFICATE OF DEPOSIT
DEFINITION:
A certificate of deposit (CD) is a product offered by banks and credit unions that offers an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.
FUNCTION
CDs are a form of time deposit. In return for a higher interest rate, you promise to keep your cash in the bank for six months, 18 months, or even several years.
IS IT NEGOTIABLE OR NON NEGOTIABLE?
Non-negotiable CDs can't be sold before maturity, so the investor can only receive payment from the issuing bank. If the money is withdrawn before maturity, then the bank pays a lower rate of interest as an early withdrawal penalty.
Negotiable CDs, introduced in the early 1960s, can be sold before maturity in the secondary money market. However, only short-term CDs—less than 3 months—have an appreciable market.