Professional Documents
Culture Documents
2. The original parties in a bill of exchange are the drawer, acceptor and payee.
The original parties in a promissory note are the maker and payee.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true
3. A signature by procuration operates as notice that the agent has but a limited
authority to sign, and the principal is bound only is case the agent is so doing
acted within the actual limits of his authority.
A conditional indorsement renders the instrument nonnegotiable.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true
5. Every negotiable instrument is deemed prima facie to have been issued for a
valuable consideration, and every person whose signature appears thereon
have to become a party thereto for value.
The bank is not liable to the holder, unless and until it accepts.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true
17. M signed a blank check which he inadvertently left in his desk at his office. P
later stole the same, who filled in the amount of P 20,000.00 and a fictitious
name as payee. P then indorsed the check in the payee’s name and indorsed
the check to A; thereafter, A indorsed to B; then B to C, and C to D.
21. The validity and negotiability of an instrument are not affected by the
following omissions, except
a. It is not dated
b. Does not specify where it is drawn or the place where it is payable
c. Designates a particular fund from which payment is to be made
d. None of the above
22. An indorsement where the indorser adds the phrase “ without recourse” is
called
a. Blank indorsement
b. Restrictive indorsement
c. Qualified indorsement
d. Conditional indorsement
36. The following are the rights of indorsee in a restrictive indorsement, except
a. To receive payment on the instrument
b. To bring any action thereon that the indorser could bring
c. To negotiate the instrument
d. None of the above
40. “I promise to pay P or order P10,000.00, 30 days after the death of his
partner” (Sgd) M
a. Negotiable b. Non-negotiable
41. M signed a blank check which he inadvertently left in his desk at his office. P
later stole the same, who filled in the amount of P 20,000.00 and a fictitious
name as payee. P then indorsed the check in the payee’s name and indorsed
the check to A; thereafter, A indorsed to B; then B to C, and C to D.
45. The validity and negotiability of an instrument are not affected by the
following omissions, except
e. It is not dated
f. Does not specify where it is drawn or the place where it is payable
g. Designates a particular fund from which payment is to be made
h. None of the above
56. A check which has not been presented for payment within a reasonable time
after its issuance is a
a. Certifies check c. Stale check
b. Cashier’s check d. None of the above
59. Any alteration which changes the following shall be deemed to be material,
except
a. The date
b. The sum payable, either principal or interest
c. The time or place of payment
d. None of the above
61. In the renunciation of the holder of his rights against any party to the
instrument, which of the following statement is false?
a. If the instrument, is delivered to the person primarily liable without
collecting, it constitutes renunciation
b. If renunciation is made in favor of any party secondarily liable, all parties
subsequent to him are discharged from liability
c. Renunciation will not affect the rights of a holder in due course
d. If the renunciation is made in favor of the party primarily liable it must be
made before or on maturity
62. Where in a bill the drawer and the drawee are the same person or where the
drawee is a fictitious person, or a person not having the capacity to contract,
the holder, at his option, may treat the instrument as
a. Dishonored c. Bill of exchange
b. Promissory note d. Either a bill of exchange or a promissory
note
71. The following are the requisites for acceptance for honor, except
a. The bill must have been protested for non-acceptance or non-payment
b. The bill is not overdue at the time of the acceptance for honor
c. The acceptance may be made by any person
d. The holder must give his consent
76. A promissory note for 100,000.00 payable to A or order. A signs his name at
the back and delivers the note to B. B negotiated the note to C by mere
delivery.
a. title is not transferred to C because B did not endorse
b. C is a mere agent of B
c. C becomes a holder by mere delivery
d. C cannot negotiate be mere delivery to D
82. A check which has not been presented for payment within a reasonable time
after its issuance is a
a. certified checkb. stale check c. cashier’s check d. manager’s check
a. I promise to pay A or order P 100.00 if he will pass the Bar exams this year.
b. I promise to pay A or order P 100.00 10 days after the death of his dog Kinky.
c. I promise to pay A or order P 100.00 in two installments.
d. I promise to pay A P 100.00.
90. A promissory note is different from Bill of Exchange because –
a. To enforce payment of the instrument for the full amount thereof against all parties liable
thereon;
b. To receive payment and if payment is in due course the instrument is discharged;
c. He holds the instrument subject to the same defenses as if it were non-negotiable;
d. He may sue on the instrument in his own name.
93. Payable to the order of the drawee –
96. Which of the following is not warranted by a person negotiating an instrument by delivery?
a. That at the time of his endorsement the instrument is valid and subsisting
b. That the instrument is genuine and in all respect what it purports to be
c. That he has good title to it and that all prior parties have capacity to contract
d. That he has no knowledge of any fact which would impair the validity of the instrument or
render it valueless
97. Alteration which changes the following shall be deemed to be material, except -
a. He may enforce payment of the instrument for the full amount thereof against all parties
liable thereon
b. He may receive payment and if payment is in due course, the instrument is discharged
c. He holds the instrument subject to the defenses as if it were non-negotiable
d. He may sue on the instrument in his own name