Future Business Leaders of America (FBLA) Accounting Practice Test

What is a blank endorsement?

1. An endorsement with a new owner's name

2. An endorsement that limits further transfer

3. An endorsement consisting only of the endorser's signature

4. An endorsement with a future date

The correct answer is: An endorsement consisting only of the endorser's signature

A blank endorsement consists solely of the endorser's signature without any additional information, such as a new owner's name or instructions regarding the endorsement. This type of endorsement makes the instrument (like a check) payable to the bearer, meaning whoever holds the instrument can cash it or deposit it. It is straightforward and allows for easy transferability, as it does not specify a particular recipient. In contrast, the other types of endorsements include specific details that limit or define how the instrument can be further handled. Some endorsements might indicate a specific payee or contain conditions that restrict the transferability, which is not the case with a blank endorsement. Additionally, endorsements with future dates or additional instructions do not fit the definition of a blank endorsement, which is characterized solely by the presence of the endorser’s signature.