Under the Negotiable Instruments Article of the UCC, a note must conform to certain requirements to be negotiable. Similarly, a note's negotiability may be restricted or prevented. Items 1 through 5 are examples of terms, conditions, and endorsements that may appear on a note. For each item, select the effect each term, condition, or endorsement would have on the note's negotiability. Note: For questions 15, select from answers 15 . Items 6 through 8 are based on the following. On October 30, Year 4, Stratford, CPA, was engaged to audit the financial records of Stork Corp., a tractor manufacturer. During the review of notes receivable, Stratford reviewed a promissory note given to Stork by Smith Corp., one of its customers, in payment for a tractor. The note appears below.

(Front)		(Back)
July 18, Year 4
Sixty (60) days from date, the undersigned promises to		Smith Corp.
		Without Recourse
Pay to the order of Smith Corp.		R. Mall
Twenty Thousand and 00/100 ($20,000) dollars		By: R. Mall, Pres.
at West Bank		Stork Corp.
		For Collection
Rhombus Corp.		Payment Refused
G. J. Small
By: G. J. Small, Pres.

On the note's due date, Stork deposited the note for collection and was advised by the bank that Rhombus had refused payment. After payment was refused, Stork contacted Rhombus. Rhombus told Stork that Smith fraudulently induced Rhombus into executing the note and that Smith knew about Rhombus's claim before Smith endorsed the note to Stork.

_____ The note is postdated.

_____ No place of payment is indicated on the note.

_____ The note is payable to the order of a named individual.

_____The note is endorsed "For Collection."

_____ The note is payable in either money or goods.

_____Will Rhombus be required to pay the note?

_____ Is Smith liable to pay the note?

Chose from the following:

1.	Has no effect on negotiability
2.	Restricts negotiability
3.	Must be negotiated by delivery
4.	Must be indorsed to be negotiated
5.	Results in nonnegotiability
6.	Yes
7.	No