ReSA

The Review School of Accountancy

ETel. lt'io. 735-9807 & 734-3989

BUSINESS LAW Atty. Marceliano S. Bonafe,lr.

QUI? - NEGOTIABLE INSTRUMENTS LAW (Part II)
MULTIPLE CHOICE

1. Person not a party to a negotiable instrunrent.

a) Acceptor b) Drawer c) Assignor d) Endorser
2. ..I promise to pay to the orddr of c Ptrp 10,000.00, 30 days after sight. (ssd.) S." The promissory note is
negotiable because it is -
. a) Payable to the order of a specific person c) Payable to bearer
d) Letters (a) and (b) are correct
b) Payable at a fixed or determinable future time
3. Which of the following is non-negotiable
a) "I bind myself to pay B or bearer P10,000'00 (Sgd') C.
b)..IpromisetopaytotheorderofBokP10,000.00(Sgd.)C',,
.j ..I acknowtedge being indebted to B. in the amount of P10,000.00 (Sgd.) C."
d) "I agree to pay B or order P10,000..00 on demand (Sgd') Carl"
4. A fan (E) obtains the signature of a starlet (C) by way of autograph. He prepared a negotiable promissory
note above the starlet's-signature. The not.e was validly negotiated to E who is a holder in due course' What
defense can G avail against E?
a) Personal defense b) Equitable defense c) Real defense (forgery) d) Qualified defense
5, 'PAY TO W or her order US $10,000 only plus 2olo interest (Sgd. l) - TO: X, Cashier."
a) Not negotiable because the drawee is not named or indicated with reasonable certainty.
b) Negotiable because it complies with Section 1
c) Not negotiable because the surn payable is not certain.
d) Not negotiable because it is payable in foreign currency.
6. Which of the following is not a personal defense?
a) Absence of corrsideration c) Foi'gery of a signature
b) Non-delivery of a complete instrument d) Failure of consideration
7. An instrument is payable at a determinable futtrre time when. it is -
a) Undated
b) Payable at.a day certain after presentrlent
c) On or before a certain definite given date
d) Before or after a specified and certain event
e) Letters (a) and (d) are not correct

8. *I PROMISE TO pAy BEARER pHp,5,000 oR DELIVERTWO (2) SACKS 9F RICE, IF HE WANTS.(SGD.DONG)

a) Not negotiable because it requires an act in addition to the payment of money
bi trtegotiiUte because it gives the ndtder an election to require something to be done in lieu of payment of
money
c) Not negotiable because the payee is not named
g. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing,
accepting, or indorsing it, PaYable
a) At sight c) On demand
b) At presentment d) All of the above
10. An instrument is payable to bearer except:
a) P or bearer c) To the order of Spiderman
b) Bearer d) Order of the bearer
11. M signed a promissory note in favor ef R promising to pay Php.10,000.00 on Christmas Day of 2008. Who
can sue on this note and enforce the obligation?
a) Both of them ' c) M only
b) R only d) Neither M nor R

12. "Pay to P only" is an examPle of:

a) Special indorsement c) Restrictive indorsement
b) Facultativeindorsement rl) Qualified indorsement
13. Which of the fotlowing is NOT a real defense?
a) Incomplete & undelivered instrument c) Material alteration
b) Forgery d) Fraud in inducement
14. A: A check is a bill of exchange drawn on a bank payable on dernand or at a fixed determinable future
time.
B: A check must be presented fior payment within six (6) months after its issue otherwise it becomes stale
And the drawer will be discharged from liability'
a) Both statements are true