ABE International College of Business and Accountancy

Tacloban Campus, Tacloban City

NEGOTIABLE INSTRUMENT/ REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

MIDTERM
F / 8:00 – 9:00 am

PART 1. Explain or state briefly the rule or reason for your answers
1. A bill of exchange signed by W addressed to X states: “Please pay Y or order P10,000.” Is the bill
negotiable?
2. “I promise to pay X P10,000 within 10 days before I retire from government service.” Is the note
negotiable?
3. X obtains W’s signature for autograph purposes. Then X writes a negotiable instrument over it and
indorses it to Y, then Y to Z, then Z to A. Can the instrument be enforced by A against W?
4. W signs a bill of exchange in favor of X for P10,000. Give an instance when X may enforce payment
although W has not received any consideration from X for the bill.
5. State the liability of a maker of a promissory note when there is:
a. Absence of consideration;
b. Failure of consideration for the note.

Prepared by:

Nikki V. Bucatcat, CPA

Instructor

ABE International College of Business and Accountancy

Tacloban Campus, Tacloban City

NEGOTIABLE INSTRUMENT/ REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

MIDTERM
F / 8:00 – 9:00 am

PART 1. Explain or state briefly the rule or reason for your answers
6. A bill of exchange signed by W addressed to X states: “Please pay Y or order P10,000.” Is the bill
negotiable?
7. “I promise to pay X P10,000 within 10 days before I retire from government service.” Is the note
negotiable?
8. X obtains W’s signature for autograph purposes. Then X writes a negotiable instrument over it and
indorses it to Y, then Y to Z, then Z to A. Can the instrument be enforced by A against W?
9. W signs a bill of exchange in favor of X for P10,000. Give an instance when X may enforce payment
although W has not received any consideration from X for the bill.
10. State the liability of a maker of a promissory note when there is:
c. Absence of consideration;
d. Failure of consideration for the note.

Prepared by:

Nikki V. Bucatcat, CPA

Instructor