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7. A quality of a bill or a note whereby it may pass from hand to hand similar to money.
A. Tranferability
B. Assignability
C. Negotiability
D. Capability
10. Which of the following bills of exchange may be treated as a promissory note by the
holder?
A. To C. Pay P100.00 to the order of P. Signed A.
B. To X. Pay P1,000.00 to P or bearer. Signed X.
C. To Drawee. Pay P10,000 to P or order. Signed Drawer.
D. To Metrobank. Pay P100,000 to bearer. Signed Mr. Luhit.
18. He is the person to whom the promise is made or the instrument is made payable.
A. Holder
B. Referee
C. Payee
D. Acceptor
19. The following are exceptions to the general rule that only persons who sign the
negotiable instrument are liable thereon, except:
A. Agent who fails to disclose his principal
B. Written promise to accept a bill before it is drawn
C. Acceptance of a bill on a separate paper
D. Persons signing under a trade name
21. Statement I: In case of conflict between words and figures, the words control.
Statement II: The written words prevail over the printed words.
A. Only Statement I is true
B. Statements I and II are true
C. Only Statement II is true
D. Statements I and II are false
22. If this is the last indorsement, the instrument may be negotiated by delivery.
A. Special
B. Restrictive
C. Blank
D. Qualified
25. M wrote a complete promissory note payable to bearer. The note was stolen and his
signature forged. It ends up in the hands of a holder in due course. Which of the following
is true?
A. M can set up the defense of want of delivery of a complete instrument.
B. M is liable because he is an indorser.
C. M is not liable because the forged signature is inoperative.
D. M is liable to a holder in due course.
26. Which of the following are requirements for acceptance of a bill on a separate piece of
paper?
A. acceptance must be shown to the person to whom the instrument is negotiated
B. such person must take the bill for value on the faith of such acceptance
C. A and B
D. None of the above
27. The transfer of possession, actual or constructive, from one person to another with
intent to transfer title thereto
A. Delivery
B. Negotiation
C. Assignment
D. Indorsement
28. X forged the signature of an indorser on a bill of exchange payable to order. Which of
the following is true?
A. Only X is liable as forger
B. All indorsers prior to the forgery are liable
C. All indorsers after the forgery are liable
D. Blank indorsers are not liable
29. M signs a blank piece of paper and delivers it to P with the intention of making the
instrument negotiable.
A. P can fill it up for any amount
B. P has implied authority to complete it
C. A and B
D. None of the above
30. It is the first delivery of the instrument complete in form to a person who takes it as a
holder
A. Assignment
B. Negotiation
C. Issuance
D. Indorsement
31. They are parties who are not in direct contractual relation to each other.
A. remote parties
B. immediate parties
C. Drawers
D. Holders
34. It is the final act essential to the consummation of an obligation under a negotiable
instrument.
A. Delivery
B. Indorsement
C. Transfer
D. Signature
35. A signature on a blank paper delivered by the person making the signature in order
that the paper may be converted into a negotiable instrument operates as a _______
authority to fill it up as such for any amount.
A. Absolute
B. General
C. Special
D. Prima facie
36. The writing of the signature on a paper attached to the negotiable instrument.
A. Allonge
B. Procuration
C. Forgery
D. Issuance
38. The act by which a principal gives power to another to act in his place as he could
himself.
A. Allonge
B. Forgery
C. Procuration
D. Issuance
40. Statement I: A person who places his signature on an instrument where it is not clear in
what capacity he is signing is deemed a holder.
Statement II: An instrument that states: "Pay to bearer Jill P1,000.00" is not
negotiable.
A. Only Statement I is true
B. Statements I and II are true
C. Only Statement II is true
D. Statements I and II are false