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List all the forms of money mentioned in the passage and match thåò with the following definitions.

1. A bank's unqualified guarantee to pay a specified sum to aspecified individual or organization.

2. A negotiable instrument issued only by the Bank of England and signed by the Chief Cashier of the Bank.

3. A written order to a bank to pay a stated amount of money.

4. A negotiable instrument issued by a bank in exchange for cash and readily usable in most parts of the world.

5. Token money largely used for small purchases and transactions.

6. A written order to a bank to pay a stated amount of money to a stated person or, after endorsement, to the bearer on or within a stated time after a given date.

 

Choose the right answer.

1. «We constantly handle coins and bills» means:

a) cash them under most circumstances, b) deal with them, c) receive them.

2. «Bills of every denomination» denote:

a) bank notes of different values, b) bank notes of various sizes, c) other means of exchange.

3. «Legal tender» is:

a) a type of paper currency, b) a requirement to accept in settlement of a debt, c) money guaranteed by a government.

4.«Both cheques and traveller's cheques are readily accepted» means:

a) able to be given to another party, b) certified by the bank that funds are available, c) endorsed by an officer of the bank.

5. «The cheque will be honoured» means:

a) that it will be readily accepted by creditors, b) that it will be treated with respect, c) that the bank will be ready to cash it.

6. «A bearer» is:

a) a person who is named as payee on the exchange document, b) an officer of the bank who endorses the cheque, c) the person offering the exchange document and demanding payment.

7. «Credit standing» is:

a) an ability to repay the loan, b) an ability to raise money, c) an ability to provide credit.

9. For each of the following phrases find another one in the text that explains it.

1. Money issued by the central bank of a country.

2. A piece of currency made of metal.

3. Unit of the bank note's value.

4. A document in settlement of a large debt guaranteed by the bank.

5. A document which establishes the identity of a person settling by cheque.

6. Cashing in a Bill of Exchange before it is due for payment.

7. The bank's readiness to accept a cheque for payment.

Read and translate text B using a dictionary

Text B

Cheques are familiar to most people, because they finance nearly all domestic transfers. Bills of exchange are not so well known but are used extensively in the settlement of international trade. Promissory notes are like the gambler's IOU (I owe you) acknowledgement of debt but without any specified date of repayment. Promissory notes issued by private persons are hardly ever seen in banks nowadays. But the banknotes which banks continually handle are the most celebrated promissory notes of all. However such negotiable instruments like bills of exchange, cheques and promissory notes other than banknotes, are not money, although they perform very similar functions. Cheques and bills of exchange are the most important financial instruments that keep the wheels of commerce turning.



As bills developed before cheques came into general use, we will consider them first. Suppose A in London exported some cotton of £5,000 worth to  in Paris, the contract stipulating that payment is to be made three months after the dispatch of the goods. In due course A drew a bill on  and sent it with the bill of lading and the insurance policy to Paris where  accepted it by signing his name vertically across the bill.

A is the drawer of the bill and, until he is paid, the creditor. Â is the drawee of the bill, the person on whom the bill is drawn and, until he pays, the debtor. When he accepts the bill he is called the acceptor and the bill is called the acceptance. In this case A acts as a payee of the bill and the wording may be "Pay to the order of ourselves", the "ourselves" being A. The words "value received" are often added to establish "value consideration" which is normally one of the essentials of a valid contract.

When a bill is payable at a time in the future it is known as a term bill. So this was the case where three months' credit had been agreed. If B, the drawee, is expected to pay immediately when he sees the bill no acceptance is needed and the bill which is payable at sight (or on demand) is called a sight bill.

Banks used to accept the bills on behalf of their customers who wanted their bills to be considered better and this led to the emergence of various accepting houses. Some holders of bills wanted to have the money immediately and sold them for less than the sum of money promised. The financial institutions which spe­cialize in buying bills at a discount are called discount houses. They buy bills, then collect the proceeds upon the day of maturity and make a profit.

A cheque is a special form of a bill of exchange, namely, one payable on demand and drawn on a banker. Cheques do not require acceptance.

If we look at the form of a cheque we shall see that it is an order to the bank from a depositor of this bank for money to be paid out of his account. At the top of the cheque is printed the name and address of the bank branch of the account holder. It will make the payment ordered, once it has checked the balance or amount in the account, to make sure that there is enough money to cover the withdrawal. Cheques like bills of exchange may change hands and are still good for payment. In this case the cheque holder signs or endorses the back.

The two vertical lines constitute a crossing which ensures that the cheque cannot be cashed at a bank but must be paid in for the credit of any account whether it is another bank account or a building society or savings account. Thus crossed cheques provide a safer means of payment than open cheques.

There are two main types of crossing: general and special. A general crossing with or without the words "and Company" or "not negotiable" which means that the cheque must be paid into any bank account whereas the words "not negotiable" turn it into a nonnegotiable instrument and a person taking such a cheque shall not have and shall not be capable of giving a better title to the cheque than that of his transferor. Thus to be absolutely certain that you will not be liable for the amount of your cheques in event of their being stolen, you should always cross them not negotiable.

The effect of a special crossing is that the cheques can only be paid into an account with the specified bank or specified branch indicated on the crossing which it bears across its face. So if a cheque is stolen and the thief forges the endorsement and tries to cash it across a bank counter he will not be able to do so if the cheque is crossed, for every banker knows that he cashes a crossed cheque over the counter at his own risk.

Sometimes a cheque may be crossed "account payee only". Such cheques would never be paid into any account other than the payee's. If it is not, the collecting bank is put on enquiry and should take steps to find out why it is being paid into another account.

11. Answer the following questions based on text B:

1. How many parties can there be to a bill of exchange and to a cheque?

2. How do bills change hands?

3. What caused the emergence of discount houses?

4. In what way do cheques differ from bills of exchange?

5. What is a crossed cheque? What types of crossing do you know? Describe each of them.

 

12. Make up sentences of your own using the following expressions from text B.

To issue a promissory note, to be payable at sight, the day of maturity, to cover the withdrawal, must be paid in for the credit of any account, to be crossed "account payee only", to give a title to the cheque, nonnegotiable instrument.

 

13. Say what is true and what is false. Correct the false sentences.

1. Promissory note is an acknowledgement of debt with a specified date of repayment

2. Only bills of exchange are the most important financial instruments.

3. The drawer is a person who pays money due to the bill.

4. A bill payable of a time in the future is called a term bill.

5. If you want to get money immediately and hold some bills with future date of payment you may sell them for the sum of money promised.

6. Cheques require acceptance, because it is an order to the bank from a depositor to pay money out of his account.

7. At the top of the cheque is printed the name and address of the person to whom the payment should be made.

8. There is only one holder for cheques and bills of exchange and it may not be passed from hands to hands.

9. Crossed cheques are safer than open ones.

10. Due to a special crossing the cheque can only be paid with the specified bank.

 

14. Using the words in brackets, explain the meaning of the following terms:

to discount a bill (to buy, lower price, money market, financial instrument);

special crossing (cheque, to be stolen, to cash, thief, to be impossible);

acceptance (bill of exchange, to sign, debtor, to guarantee, payment);

negotiable instrument (to sell, to buy, secondary financial market, to get profit);

discount house (institution, financial instrument, to deal with, commission).

 

15. Match the following words with the correct definition from the list.

Bill of exchange, note, withdrawal, balance, drawer, honour, crossed cheque, present a cheque, endorse, negotiable instruments, payee, encashment

 

1. The amount held in a bank account at any particular date.

2. A cheque which will be paid into an account only.

3. An account-holder who draws up or makes out a cheque and signs it.

4. Drawing cash against a cheque.

5. To sign the back of a cheque.

6. To pay as promised.

7. A person named to receive payment.

8. Paying a cheque in at a bank for clearing.

9. Drawing cash out of a bank account by the use of cheques, standing orders, etc.

10. A written order by a drawer to a drawee to pay a sum on the given date to drawer or to named payee.

11.The device used in place of cash in a transaction like cheques and money orders.

12. Written promises to pay a specific amount of money within a specified period of time.

 

 

16. Look through the text and then fill the spaces with the words below. Translate the text into Russian.

The drawer, is payable, maturity, the cheque, collecting,

Beneficiary, has signed, drawn

A cheque differs from the bill of exchange. The drawer of... (1) is a person who has to pay it and it is always ... (2) on a banker and not on a private person, firm or company. ... (3) is the person who ... (4) the cheque, the drawee is the bank on which the cheque is drawn. ... (5) is the person to whom the cheque ... (6) and who is to receive the benefit. The drawee bank is also the paying bank, while the bank at which the payee pays in a cheque is known as the ... (7) bank. A cheque does not need ... (8) prior to payment.


Date: 2015-12-11; view: 1795


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