NEGOTIABLE INSTRUMENTS-Quizzer (Part II)

FILL IN THE BLANKS: ATTY. APSM, CPA

1. A check drawn by a bank against itself is either a)__________or a b)__________; and if drawn by
a bank against another bank, it is a: a)__________.

2. A check with two parallel lines transversely written on its face is a a)__________; if the holder
must sign twice thereon, it is a b)_________; and if the bank is required to set aside funds to cover
the check, it is a c)_________.

3. The relationship between a bank and its depositors is that of a)___________, with the bank as
b)___________ and the depositor as c)____________ but only up to the d)___________.

4. A time draft is payable at a)___________ or at b)____________ while a sight draft is payable

c)___________ d)____________ or e)___________.

5. The main features of a check are that it is always payable a)__________ and is always drawn on
or against b)___________.

6. A check which has not been presented for payment for an unreasonable period of time becomes:
a)__________ and attains that status after b)__________ from its c)__________.

7. The transfer of an instrument from one person to another is known as a)__________, provided the
transferee is constituted as b)__________ if payable to bearer such transfer can be affected by
c)___________ and if payable to order it can only be made by d)__________ followed by
e)____________.

8. The signing of one’s name at the dorsal side of an instrument is known as a)__________ if made
on a separate instrument, it is known as b)__________ while the separate instrument itself is an
c)__________.

9. The Law on Negotiable Instruments is contained under a)___________ which took effect on
b)___________.

10. A person who, without consideration, affixes his signature on an instrument as a party thereto is an
a)__________, if he affixes his signature thereon without being a party, he is an b)__________,
and if his name is merely added in case of dishonor he is c)__________.

11. The person referred to by the drawer to be consulted in case of problem but without liability is
known as __________.

12. The person primarily liable on a bill of exchange is a)____________, while on a promissory note,
it is b)___________.

13. The person secondarily liable on a promissory note after negotiation is a)__________; while on a
bill of exchange it is b)___________.

14. The original party to an instrument, who is not a party to a promissory note, is a)___________,
and if a check, it could only be a b)___________.

15. The issuer of a promissory note is commonly known as a)___________ also known as
b)___________; while that of a bill of exchange is known as c)___________.

16. The fraudulent alteration of a document is known as a)___________, if done by a stranger it is

called b)___________while the employment of fraud to make a person falsely believe that he is
not signing a negotiable instrument is known either as c)____________ or d)____________.

17. A person whose signature has been forged on an instrument could nonetheless be held liable if
a)____________, b)____________ or c)____________.

18. A bill of exchange is deemed dishonored thru a)_____________ or b)___________; and if a

promissory note, c)____________.

19. There is forgery when a)____________ b)___________ and c)_____________.

20. One who guarantees a bill of exchange is called a)____________ ,while the instrument itself is
called b)____________.
21. For a bill of exchange to be negotiable, it is first required that it should be a)__________ to be
signed by b)___________ and if a promissory note, it should be c)___________ to be signed by
d)___________.

22. As fourth requisite to make a promissory negotiable, it must be payable to a)__________ or

b)___________.

23. As second requisite to make a bill of exchange negotiable it must contain an a)___________ to
pay b)___________ and if a promissory note, to contain an c)___________.

24. As third requisite to make a promissory note negotiable it must be made payable on
a)___________ or b)___________ or c)____________.

25. As fifth requisite to make a bill of exchange negotiable, the third party thereto, known as
a)____________ must be b)___________ or otherwise indicated therein c)___________.

26. A bill of exchange may be treated as a promissory note if the drawer and drawee are
a)__________ or if the drawee is either b)__________ or c)__________.

27. A check that states “PAY TO JUAN OR BEARER” is one payable to a)__________ and if states
“PAY TO BEARER JUAN” it is payable b)________.

28. A check payable “TO CASH” is payable to a)___________ and if states “ORDER OF
RICARDO” it is payable to b)___________.

29. An endorsement that fails to indicate the name of the endorsee is a)__________ and if it does, it is
b)____________.

30. An endorsement stating “PAY TO UST ONLY” is a)___________; and if stating “NOTICE OF
DISHONOR WAIVED”, it is b)____________.

31. An indorsement stating “WITHOUT RECOURSE” is a)___________; and if stating “IF THE
INDORSEE GRADUATES” it is b)___________.

32. Notice of dishonor must be in a form of PROTEST in the following cases a)__________
b)___________ c)___________.

33. The cause or motive for the issuance of a negotiable instrument is known as a)_________ that
may consist of a value b)_________ c)_________ d)_________.

34. The type of check that operates as an assignment of funds in the hands of the bank is
a)___________ and the act of drawing a check against uncollected deposits is b)___________.

35. The issuance of a bouncing check is punishable under (specific law violated) a)__________,
provided that the drawer is first given notice to redeem the check in cash for a period of
b)___________.

36. For purpose of the above law, a check becomes stale after a)___________, while the maximum
period of penalty for imprisonment on account of the offense is b)__________.

37. A defense available against any holder is a)___________ and if available against not a holder in
due course is b)____________.

38. An accommodation party is a)___________, hence b)___________ while an avalista is only

c)____________, hence d)______________.

39. Presentment for acceptance is not required when a)___________ b)___________ c)____________
d)_____________ e)____________.

40. To discharge a Negotiable Instrument, payment in due course requires that it must be done
a)___________ b)____________ and c)____________.

41. A holder in due course is one who received the instrument a)_____________ b)_____________
c)____________ d)_____________. He is automatically a ____________ but not vise versa.

“The quality of your habitual thoughts is the true measure of your power”. – R. Collier