Professional Documents
Culture Documents
3. Since the instrument must be personally exhibited to the person from whom
payment is sought, can there be any effective presentment if that person is
inaccessible or absent?
a. Yes b. No c. It depends on the circumstances
5. Where there are several persons, not partners, who are primarily liable,
presentment must be made to them all.
a. True b. False c. It may depend on whether or not
a place of payment is specified
7. The drawer of a check issued against a closed demand account gives a stop-
payment order to the drawee bank. Does the holder have to present it for
payment to the drawee bank before demanding payment from the drawer?
a. Yes b. No c. If the stop-payment order was valid
8. In the case of a manager’s check, or where the drawer and the drawee are
one and the same person, presentment for payment is not required to hold
that person liable to pay.
a. True b. False c. Not necessarily so
9. After the bill has been dishonored by non-acceptance, the drawer or indorser
may be immediately held liable even without a presentment for payment.
a. True b. False c. Not necessarily so
10. The holder presents the promissory note to the maker, who assured him of
payment in just three days. Is there a dishonor?
a. Yes b. No c. If the maker is unable to pay after
three days as he has promised
11. A notice of dishonor may be given
a. In writing b. Orally c. Personally d. By electronic means d. By any
or all of the foregoing
12. A protest serves the same purpose as a notice of dishonor, and therefore it is
up to the holder to choose the form when the bill has been dishonored.
a. True b. False c. It depends on the type of bill
13. One who gives a notice of dishonor for another need not be authorized, but
one who receives a notice of dishonor must be authorized.
a. True b. False d. Not necessarily so
18.There is payment in due course when the obligation is paid in full and in
cash to the holder by the principal obligor.
a. True b. False c. If the payee is a holder in due course d. Only
when paid at or after maturity
19. The holder indorses the instrument back to the principal debtor before
maturity. Is the instrument discharged or remains negotiable?
a. Discharged b. Negotiable c. The principal debtor decides
21. The discharge of an instrument means the discharge of all persons otherwise
liable thereon.
a. True b. False c. Not necessarily so
22.Without the indorser’s knowledge, the holder allows the maker to extend the
time of payment. Can the indorser claim that he has been discharged?
a. Yes b. No c. Only if the holder’s right of recourse against
him has not been expressly reserved
23. When an indorser pays with intent to seek reimbursement from all prior
parties, is there a payment in due course or discharge of the instrument?
a. Yes b. No c. Not necessarily so
24. Under the same facts, can the indorser renegotiate the instrument?
a. Yes b. No c. Only if it is still negotiable
25. In this case notice of dishonor is not waived:
a. The indorser promises to pay after learning of the dishonor
b. The maker offers to compromise
c. Neither a nor b.
28.A bill drawn payable to the drawer’s own order is complete even without an
indorsement when accepted by the drawee. But a promissory note issued
payable to the maker’s own order is not complete until indorsed by him.
a. True b. False c. Not necessarily so
30. It is a loan made by a bank that it will pay drafts drawn by the seller to the
buyer up to a stated amount, subject to certain conditions.
a. Letter of credit b. Draft c. Trade acceptance
31.To facilitate the determination of the exact date of dishonor, a bill cannot be
addressed to drawee A or B but only to A and B.
a. True b. False c. It depends on the drawer because he is
the one who is giving the order to pay
32.The drawer names him as the one whom the holder may resort to in case the
bill is dishonored by the drawee.
a. Guarantor b. Accommodation party c. Referee in case of need
37. Acceptance is required within 24 hours after presentment. If the bill is not
accepted the holder must treat it as dishonored and issue notices of dishonor
to the drawer and the indorsers. But if the drawee refuses to return the bill
without a decision to accept or reject, the holder may consider it as having
been accepted.
a. Both true b. A is true, B is false c. Both false
39. Payment by an acceptor for honor does not discharge the bill because
a. He is not a party primarily liable
b. He has the right to reimbursement from any prior parties
c. There is no payment in due course
d. For all the foregoing reasons.
40. May a holder refuse an offered payment for honor when the bill is overdue?
a. Yes b. No c. It depends on who offers it
41. In bills in set, the drawee is not liable for more than part since his order is to
accept or pay only one part.
a. True b. False c. Not necessarily so
42. When a check is certified, the drawer and indorsers are discharged from
liability. Is this the same rule in the case of ordinary bill that is accepted by
drawee?
a. Yes b. No c. It depends on whether or not the
drawee is able to pay
43. Crossing a check is meant to ensure payment to the intended payee. Thus,
the crossed check is not encashed but deposited with the payee’s bank for
collection. Will this apply to a crossed check payable to cash?
a. Yes b. No c. It depends on the drawee bank
44. A check becomes stale after being outstanding for more than
a. 60 days b. 90 days c. 180 days
45. A stale check can still be paid or encashed by the drawee bank if cleared
after consulting with the drawer-depositor.
a. True b. False c. Only with BSP approval
46. In practice, Philippine banks do not certify checks without the express
authority of the drawer-depositor. Is this true?
a. Yes c. No c. Mostlyto accommodate requests of
their valued clients
47. B.P. 22 punishes the act of knowingly issuing an unfunded check for
account or for value. To create the presumption of knowledge, a written
notice of dishonor is sent to the drawer, who is given at least how many days
to settle the obligation?
a. Fifteen b. Ten c. Five
49. Online banking, the use of credit and debit cards, ATM and other
computerized banking transactions have taken much of the traditional role of
negotiable instruments as a mode of settling monetary obligations.
Negotiable instruments, however, will continue to be substitutes for money,
and as medium of exchange and credit transactions in the near future.
a. True b. False
50. If a negotiable instrument involves the obligation to pay money, a
negotiable document of title involves the obligation
a. To deliver goods b. To facilitate sales and credit transactions involving
goods c. Both
53. An indorser of a document of title guarantees that the bailee shall deliver
the goods to the indorsee.
a. True b. False c. If such guaranty is implied
55.An innocent purchaser for value of the negotiable document, much like a
holder in due course, is protected from defenses, such as breach of duty,
loss, theft, fraud, accident, mistake, duress or conversion.
a. True b. False c. Only if at the time of his
purchase he had no notice thereof
56. A thief of the goods deposited with the bailee cannot acquire better rights
to the goods than the owner from whom they were stolen.
a. True b. False c. Only if the owner had not been
negligent
57. Creditors who want to attach the goods covered by a negotiable document
of title cannot take the goods from the bailee without surrendering the
document to the bailee.
a. True b. False c. Unless the document is either
impounded or its negotiation is enjoined by court order
58. Similarly, an unpaid seller may exercise his right of stoppage in transitu by
notifying the carrier or other bailee concerned, but to oblige the latter to
redeliver the goods, he must surrender the negotiable document of title. The
purpose is
a. To avoid any counterclaim from the buyer.
b. For the bailee to be sure about the seller’s real intentions.
c. To forestall the possibility that the document might have been negotiated
to a party other than the buyer or the seller.
59. The seller’s right to stoppage in transitu cannot prevail over the right of an
innocent purchaser for value to whom the negotiable document of title
covering the goods had been negotiated.
a. True b. False c. Only if the seller’s notification to the
carrier or other bailee came after the negotiation of the document
61. It is a contract or receipt for the transport of goods and their delivery to the
person named, to his order or to bearer.
a. Quedan b. Bill of lading c. Job order
62.It is a contract or receipt for goods deposited with a bodegero containing the
latter’s undertaking to hold and deliver the said goods to a specified person,
to his order or to bearer.
a. Warehouse receipt b. Dock warrant c. Deposit slip
67. A warehouseman may withhold the release of the goods pending the
satisfaction of his lien for storage fees and charges and the surrender and
cancellation of the warehouse receipt covering the goods.
a. True b. False c. It depends on his operational policy
69. While goods must be kept separate, fungible goods, such as rice, sugar,
etc., may be commingled if authorized by agreement or by custom.
a. In that case, the different owners become co-owners of the whole mass.
b. In that case, the warehouseman is liable to the various depositors for
whom separate receipts have been issued.
c. Both a and b.
70. The maximum deposit insurance coverage per depositor per bank
a. P400,000 b. P500,000 c. P1,000,000.00
71. The PDIC Law sets these rules: [A] A joint account is insured separately
from single accounts, and one’s coverage can be only be up to the maximum
allowed per depositor. [B] Joint accounts held by a natural person with a
juridical person are presumed to belong solely to the juridical person. [C] It
is possible, however, to have double the maximum amount of coverage if
one has single accounts and joint accounts.
a. A, B and C are correct.
b. A and B are correct but C is not.
c. A and C are correct but B is not.
d. B and C are correct but A is not.
72. Also known as dormant accounts,, unclaimed balances or deposits and other
evidence of indebtedness with banks and trust companies belonging to dead
persons are allowed to be echeated or deposited with the Treasurer of the
Philippines. This includes accounts on which there had not been deposits or
withdrawals in the last –
a. Ten years b. Eight years c. Five years
73. Products protected under the bank secrecy law (RA 1405) are:
a. All deposits of whatever nature
b. Investments in government bonds
c. Trust accounts
d. All of the foregoing.
75. In the case of foreign currency deposits, the only instance for disclosure is
upon the written permission of the depositor. a. True b. False