Laws for Accountants

There are several terms you must know to be able to handle commercial paper issues. Here are the terms you need to begin with-what is the definition and what are the specific elements required?

1. commercial paper

2. holder

3. holder in due course

4. real defenses

5. personal defenses

6. elements of negotiability

7. shelter principle

a. Let's begin with these terms-their definitions and the elements required to fulfill the requirements for these various terms are quite detailed and specific. Let's stay away from broad, general statements and be very specific in our answers.

b. Now we need to understand how all of these rules, definitions and requirements work to make the commercial paper market work.