[the LAST Coffee]

I keep getting a question on Ninja MCQ concerning what type of instrument is this.

It looks exactly like a check but turns out to be a draft. I don’t see the differences…. Anyone want to clarify this for me?

FAR 84 (AUG '15)
BEC 83 (AUG '15)
AUD 79 (OCT '15)
REG 71, 78! (NOV '15, FEB '16)

[EuroAddict]

The usual way they trip you up is that a check has to be payable at a certain day. A draft won't specify.

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BEC - 77, 03/2015 (first try)
FAR - 79, 05/2015 (second try)
REG - 83, 12/2015 (first try)
AUD - 84, 03/2015 (first try)

I got 99 problems but the CPA ain't one.

[wombataholic]

If I remember right, the questions where it asks if it's a check or draft will have the instrument, which will be dated April 11 (or any date), then say “Pay $$$$$ to the order of John Doe on May 15th.” Or something similar.

In this case it's a draft, because it's not payable on demand. Checks are payable on demand. The key is the part of the instrument that says “…on May 15th” when the instrument is dated April 11. It is not a post-dated check, it is a draft.

If you see the “…on May 15th” in the pay to order of section and it otherwise looks like a check, that should be your clue that it's a draft.

Licensed CPA
Passed each section on the first try with Ninja Notes/MCQ/Audio

[Author]

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