[Anonymous]

“Hunt has in his possession a negotiable instrument that was originally payable to the order of Carr. It was transferred to Hunt by a mere delivery by Drake, who took it from Carr in good faith in satisfaction of an antecedent debt. The back of the instrument read as follows: “Pay to the order of Drake in satisfaction of my prior purchase of a new video calculator, signed Carr.” Which of the following is correct?

Correct A.
Hunt has the right to assert Drake’s rights, including his standing as a holder in due course, and also has the right to obtain Drake’s signature.

B.
Drake’s taking the instrument for an antecedent debt prevents him from qualifying as a holder in due course.

C.
Carr’s endorsement was a special endorsement; thus, Drake’s signature was not required in order to negotiate it.

D.
Hunt is a holder in due course.

A holder in due course has accepted a negotiable instrument for value, in good faith, and without notice that the instrument is overdue or dishonored, has irregularities, or that any person has a defense against paying it. Drake was a holder in due course because the instrument was acquired for an existing debt. Hunt is a holder in due course because the instrument was acquired for a purchase. A holder after a holder in due course has all the rights of the first holder in due course. Consequently, Hunt has the right to assert Drake’s rights.”

The correct answer is A, however D is also a correct answer as well (as you can see by the italicized sentences). The question of this problem is simply “which of the following is correct?” Why is A considered the correct answer when D is also correct?

[CPA788]

What if I told you commercial paper wasn't on the new exam and you didn't have to study it…? 🙂

Per the blueprints – no commercial paper. Can I get a second from anyone? It's been mentioned on the REG study thread.

I tried to go grab the link to the blueprints and the AICPA page 404'd on me. Nice.

BEC - 74, 77
FAR - 72, 71 (retake 7/29)
REG - 69
AUD - Q4 '16

CA Candidate

[CPA788]

Found it via another route on their site: https://www.aicpa.org/BecomeACPA/CPAExam/ExaminationContent/DownloadableDocuments/cpa-exam-blueprints-effective-20170401.pdf

Scroll down to page 82+ and you'll see the REG categories broken down.

BEC - 74, 77
FAR - 72, 71 (retake 7/29)
REG - 69
AUD - Q4 '16

CA Candidate

[thelatebloomer]

I think this is because the scenario more specifically defines Hunt as a “holder through a holder in due course,” not a “holder in due course.” And by being a “holder through a holder in due course” he can assert the rights of the “holder in due course,” which is Drake. I do remember getting one MCQ wrong in practice because of this.

With that said, as CPA788 mentioned, this material won't be on the exam. 🙂

[Anonymous]

Oh wow, thanks guys. Guess I should go over what other changes there are. Wasted a good two days, thought it was only dodd frank.

[CPA788]

I would still be more comfortable if someone else confirmed my interpretation. Someone in the REG thread said it so I looked at the Blueprints and it wasn't there. I'll post in the Ask Jeff inbox.

BEC - 74, 77
FAR - 72, 71 (retake 7/29)
REG - 69
AUD - Q4 '16

CA Candidate

[thelatebloomer]

Last week when I took the exam I didn't see a single negotiable instruments question. There was one question that involved a negotiable instrument, but it was merely incidental.

[Anonymous]

So aside from the blueprint cpa788 posted, where can I find out for sure what changes to the REG exam content have been made?

I was under the impression my NINJA MCQ would get an update or that I would receive an email saying what's no longer tested and what's new.

[Anonymous]

Based on the blueprints, the entire section of Title and Title Transfer won't be tested on as well as a few other sections.

I thought the NINJA software would at least get an update. Have burned a considerable amount of time. Also if these sections aren't being tested on, then shouldn't REG be considered easier now? Why is there no discussion on this?

[Author]

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