What is the term used for the act of signing a check or promissory note to transfer it to another party?

What is the term used for the act of signing a check or promissory note to transfer it to another party?

• A. Transfer
• B. Endorsement
• C. Assignment
• D. Conveyance

Answer: (B)

The term used for the act of signing a check or promissory note to transfer it to another party is "endorsement." When a person endorses a check, they are authorizing the transfer of that check to another individual or entity by signing their name on the back or front, depending on the type of endorsement. This signature signifies the transfer of ownership and the right to receive the funds represented by the check or note. Endorsement is a critical component in the process of negotiating financial instruments, as it legally binds the endorser to the transaction and allows the recipient to present the instrument for payment. Understanding this concept is essential in the fields of finance and real estate, as it applies to various scenarios involving the assignment of financial rights or obligations. The other terms listed, such as transfer, assignment, and conveyance, do relate to movement or transfer of rights or ownership but do not specifically refer to the act of signing a check or promissory note. Transfer is a general term that could apply in numerous contexts; assignment typically pertains to the transfer of contractual rights; and conveyance is generally used in the context of real property transactions. Thus, endorsement is the precise term that explains the act of signing financial instruments for transfer to another

The term used for the act of signing a check or promissory note to transfer it to another party is "endorsement." When a person endorses a check, they are authorizing the transfer of that check to another individual or entity by signing their name on the back or front, depending on the type of endorsement. This signature signifies the transfer of ownership and the right to receive the funds represented by the check or note.

Endorsement is a critical component in the process of negotiating financial instruments, as it legally binds the endorser to the transaction and allows the recipient to present the instrument for payment. Understanding this concept is essential in the fields of finance and real estate, as it applies to various scenarios involving the assignment of financial rights or obligations.

The other terms listed, such as transfer, assignment, and conveyance, do relate to movement or transfer of rights or ownership but do not specifically refer to the act of signing a check or promissory note. Transfer is a general term that could apply in numerous contexts; assignment typically pertains to the transfer of contractual rights; and conveyance is generally used in the context of real property transactions. Thus, endorsement is the precise term that explains the act of signing financial instruments for transfer to another