1. The following are essential requisites of a negotiable promissory note except a.

must be written and signed by the drawer b. must contain an unconditional promise to pay a sum certain in money c. must be payable upon fixed determinable future time. d. must be payable to order or bearer 2. Which of the following is not an essential element of a bill of exchange? a. must be written and signed by the drawee b. must contain an unconditional promise to pay a sum certain in money c. must be payable to order or bearer d. drawee must be named therein 3. The following are negotiable except a. “Pay to bearer Jose Cruz P 10,000 upon demand”, signed by A and addressed to B b. “Pay to Jose Cruz or bearer P 10,000 upon demand”, signed by A and addressed to B c. “I oblige myself to pay Pedro Reyes or order P 3,000 ten days after day signed by M as maker. d. “Good to L or order P 5,000 July 1, 2009 signed by M as maker 4. Which of the following is negotiable? a. “ I promise to pay Jose Cruz or order P 10,000 or deliver 1 cow 20 days after date at the option of the holder” signed by M as maker b. “Pay to Pedro Reyes or bearer P 10,000 or deliver 1 cow on 4-4-10 at the option of the drawee”, signed by A and addressed to B c. “Pay to Pedro C. Cruz or order P 5,000 out of fund I deposited with you” signed by A and addressed to B d. I promise to pay K. KHO or order P 10,000 in 5 installments, first installment August 1, 2009 and every month thereafter, signed by M as maker 5. The following are functions of negotiable instrument; except: a. used as substitute for money b. medium of credit transactions c. medium of exchange for commercial transactions d. none of them. 6. Which of the following is no an incident in the life of negotiable instrument? a, Issue b. notice of dishonor c. Preparation d. Negotiation

forgery is both real and personal defense d. none of them 10. restrictive 11. This indorsement constitutes the indorser as a mere assignor of the title of the instrument: a. delivery d. Certificate of stock c. Blank c. the only indorsement is blank c. Postal Money order b. none of them. except a. that the instrument is complete and regular upon its face. the instrument is not yet overdue or no notice of dishonor c. 12. Real defenses are those that attached to the instrument itself and can be set up even against holder in due course. Special b. Which of the following is not considered real defense? . The following are requisites in order that a person can be considered a holder in due course. The following are considered negotiation except a. Which of the following is not false? a. issue b. the name of payee does not support to be the name of a person d. It is payable to a person named therein or bearer b. b. only person whose signature appear in the instrument can be held liable therein c. qualified d. None of them 8. A promissory note is payable to bearer when: a. all of the above 9. an accommodation party is liable only to a holder in due course 13. Treasury warranty d.7. a holder for value is not necessarily a holder in due course b. Which of the following is negotiable? a. holder for value and in good faith d. indorsement plus delivery c.

memorandum d. instrument is valid and subsisting 16. he has a good title c. Indorser c. payment in due course by or on behalf of the party primarily liable b. person negotiating by mere delivery 20. forgery c. acceptor c. drawer d. Maker b. Which of the following is not a warranty of a qualified indorser? a. The existence of the payee and his then capacity to indorse is a warranty of: a. The drawer and the drawee are the same person b. the drawee is fictitious d. prior parties have capacity to contact d. changing the date b. A negotiable instrument is discharged by: a. the maker b. the drawee has countermanded payment c. drawer d. the instrument is genuine b. Notice of dishonor is not required to be given by a drawer when: a. crossed . absence or failure of consideration d. minority 14. none of them 18. all of the above 17. certified b. all of them 15. fraud in factum b. changing the amount c. changing the relation of the parties d. payment in due course by the party accommodated c. Stale c. A check is not presented for payment within a reasonable length of time after issue is called a. Who of the following is party with primary liability? a. intentional cancellation thereof by the holder d. Which of the following is not considered material alternation a. none of them 19.a.

The negotiable promissory note signed by M as maker for P 10. 2009. Which of the following is correct? a. all of the above 24. 2009 d. due bill b. none of them . trade acceptance d. Signification by the drawee of his assent to comply with the order of the drawer is: a. the drawer is secondarily liable c. the bill is payable after sight b. I promise to pay Jose Reyes or order P 10. Cruz can ask for payment at anytime c. the payee can require payment at any time d. presentment for acceptance 22. Cruz cannot negotiate the note c. The following are promissory notes except: a. all of them 23. delivery d.000 is payable to Jose Cruz or bearer on May 10.21. 2009. the payee cannot negotiate the note 27.Which of the following is false? a. The instrument is considered non-negotiable because the date of issue is later than the date of payment. the issue is not negotiation d. the bill is drawn payable elsewhere than the residence of the drawee d. Indorsement c acceptance b. the bill requires it c. certificate of deposit d. Protest is required when this bill is dishonored: a. foreign c. M however issued the note to the payee May 15. Cruz can require payments only on May 15. bond 25. the acceptor is primarily liable b. The note is undated. when the drawer and drawee are the same person the holder consider the bill was a note 26. domestic/local b. the note is non negotiable b. Presentment for acceptance is required when a. the payee can require payment 10 days after issue c. b.000 ten days after the date signed by M as maker. In this case: a.

a. Which of the following is correct? a. Which of the following is false? a. On July 30. 2009 C can collect from M only P 2. E to F.000 ten days after sight SIGNED By A drawer as agent of B To: B . A is the drawer of a bill addressed to B. D to E. a promissory note cannot be pledged without the consent of the maker b. F is liable to H d. 2009 and pledged the note by indorsing it to C. Forgery is real defense 29. Cruz or order for P 5. H gave notice of dishonor to F. Maria negotiated the bill to C. H is required to notify M d. all indorsers prior to the forgery are discharged b.000 d. M dishonored the note when presented by H for payment. If the signature of A is forge.000. “ Pay to Pedro Reyes or order P 20. E stole the bill from D and indorsed it to F by forging the signature of D. C to D. 2009 C can collect from M P 5. F to G and G to H. payable to C or order 10 days after acceptance for P 8.000 from C payable July 31. If B dishonors the bill by non-payment F may give to any indorse 31.28. F in turn can give notice to G 32.000 upon demand”. M is the maker of a note payable to J. signed by A as drawer and addressed to B.000 due July 30.000. F in turn indorsed the bill to G & G to H. which of the following is false? a. 2009. on July 30. Forgery is considered a real defense d. Cruz borrowed P 2.000 c. B is required to pay F even if the signature of A is a forgery b. payable to C or order for P 10. C negotiated the bill to D. to E and E to F. “Pay to Maria or order P 20. The bill was accepted by B when presented by F. partial indorsement is allowed 30. Which of the following is true. all indorsers prior to F are discharged b. only G is discharged c. B is not required to pay F since he has the defense of forgery c. the drawer is liable to H c. C negotiated the note to D. M is the maker of a note.

Drawer A addressed a bill to B for P 20. if D paid E . The drawer is not liable to E b. the noted is not discharged since there is no payment c. C to D and D to E.000 upon demand. D to E. The drawer is liable to E since he was duly notified of the dishonor c. the unauthorized alteration renders the note void b. E to F and F to G. without authority from the prior parties. Upon proper presentment.Pedro Reyes negotiated the bill to C. Which of the following is true? a. E gave notice of dishonor to all prior parties except B.000 if G is a holder in due course d. all of the above .000 if G is a holder in due course 34. G can require M to pay P 25.000 then indorsed the note to G. a. the bill is discharged b. C negotiated the note to D. C becomes liable to D d. this bill maybe considered as a note 33. F.the bill is not required to be presented for acceptance d.000 ten days after date. B dishonored the bill by non payment. D to E. the note is discharged b. B made a conditional acceptance in this case: a. Which is correct? a. persons secondarily liable are likewise discharged c. it is still negotiable notwithstanding the conditional acceptance c. Which of the following is not correct? a. G cannot require M to pay anything c.000 payable to C or bearer. the holder cannot refuse to take a conditional acceptance d.M is the maker of a note for P 30. B paid the bill.000 payable to C or order 20 days after acceptance. M cannot re-issued the note d. M signed a promissory note payable to C or order for P 5. C negotiated the note to D. D to E and E to F. altered the amount to P 15. The indorsers are not dischaged 36. Drawer A addressed a bill to B payable to C or bearer for P 60. the bill becomes non-negotiable b. B is considered a constructive acceptor 35. G can require M to pay only P 5. C indorsed the note to D. E to F and F to M.

b 28. d 15. d 17.Suggested Answers 1. a 13. a 3. c 22. b 27. c 26.d 7. a . c 32. c 14. d 12. a 20. c 30. b 31. b 21. d 19. d 8. b 33. a 2. d 25. d 23. b 35. b 29. a 5. d 16. c 34. a 4. b 24. c 11. d 18.d 6. d 9d 10.

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