SUAREZ Questionnaire

1. Payable to the order of the drawee.

a. Pay to the order of ourselves P1,000.
b. Pay to yourself or order P1,000.
c. I promise to pay myself or order P1,000.
d. None of the above.
Answer: b
2. A demand promissory notes must be presented for payment.
a. Within a reasonable time after its issuance.
b. Within a reasonable time after the last negotiation.
c. Within a reasonable time after the last indorsement.
d. All of them.
Answer: a
3. One of the requisites of a negotiable instrument is that it must contain an
unconditional promise or order to pay a sum certain in money. Which of the
following denotes non-negotiability?
a. I promise to pay to the order of L the sum of $900 at the DBP Manila.
b. I promise to pay to the order of Y the sum of $600 and to deliver one-
fourth of the rice harvest in my farm.
c. I promise to pay N or bearer in Manila the sum of P18,000 in Philippine
pesos or in U.S. dollars.
d. I promise to pay E or bearer in Manila the sum of P27,000 in Philippine
pesos or U.S. dollars, at the option of the holder.
Answer: b
4. Absence or failure of consideration is a matter of defence against any person
a. Holder in due course.
b. Not a holder in due course.
c. Who is a holder of instrument.
d. None of the above.
Answer: b
5. Three of the following are warranties of a qualified indorser, which is not?
a. Capacity of prior parties.
b. Instrument is valid and subsisting.
c. Good title.
d. Instrument is genuine and in all respect that it purports to be.
Answer: b
6. Statement No. 1: Where a negotiable instrument is indorsed conditionally, the
person liable on the instrument may disregard the condition and legally pay the
same.
 Statement No. 2: An instrument negotiable in origin continues to be negotiable
unless restrictively indorsed or discharged by payment.
a. Both are true.
b. Both are false.
c. No. 1 is true; No. 2 is false.
d. No. 1 is false; No. 2 is true.
Answer: a
7. A person secondarily liable on the instrument is discharged, except:
a. By any act which discharged the instrument.
b. By the intentional cancellation of his signature by the holder.
c. By the discharge of a prior party.
d. By a valid tender of payment made by prior party.
e. None of the above.
Answer: e
8. An instrument is rendered non-negotiable if
a. There is an indication of a particular fund out of which reimbursement is to
be made.
b. There is an indication of a particular account to be debited with the
amount.
c. The instrument is payable out of a particular fund.
d. Answer not given.
Answer: c
9. Presentment for acceptance of a bill of exchange is not necessary
a. Where the bill is payable after sight.
b. Where the bill is drawn payable elsewhere than at the residence or place
of business of the drawee.
c. Where it is payable at a certain number of days after date.
d. Answer not given.
Answer: c
10. Statement No. 1: D has a deposit of P600,000 with PNB against which he drew
check for P100,000 in favour of P. For no reason at all, PNB refuses to pay
P100,000. P can legally hold PNB liable for P100,000 plus damages.

Statement No. 2:An instrument which contains an order or promise to do any act
in addition to the payment of money is not negotiable.
a. Both are true.
b. Both are false.
c. No.1 is true; No. 2 is false.
d. No. 1 is false; No. 2 is true.
Answer: d
11. A feature or characteristic of a bill of exchange not found in a promissory note.
a. Promise to pay
b. Order to pay
c. Promise in writing to pay
d. Unconditional promise in writing
Answer: B
12. A demand promissory note must be presented for payment.
a. Within a reasonable time after its issuance.
b. Within a reasonable time after the last negotiation
c. Within a reasonable time after the last indorsement.
d. All of them.
Answer: A
13. A check which has not been presented for payment within a reasonable time after
its issuance is a.
a. Certified check
b. State check
c. Cashiers check
d. Managers check
e. None of the above
Answer: B
14. Absence or failure of consideration is a matter of defense against any person.
a. Holder in due course.
b. Not a holder in due course.
c. Who is a holder of instrument.
d. None of the above.
Answer: B
15. An instrument which is originally negotiable ceases to be negotiable when.
a. Restrictively indorsed
b. Qualified indorsement
c. The last and only indorsement is in blank
d. None of the above.
Answer: A
16. A person secondarily liable on the instrument is discharged except:
a. By any act which discharged the instrument.
b. By the intentional cancellation of his signature by the holder.
c. By the discharged of a prior party.
d. By a valid tender of payment made by a prior party.
e. None of the above.
Answer: E
17. Any alteration which changes the following shall be deemed to be material except:
 a. The date
b. The sum payable, either for principal or interest.
c. The time or place of payment.
d. The number of the relations of the parties.
e. None of the above.
Answer: E
18. An instrument is rendered non-negotiable if:
a. There is an indication of particular fund out of which reimbursement is to
be made.
b. There is an indication of a particular account to be debited with the
amount.
c. The instrument is payable out of a particular fund.
d. Answer not given.
Answer: C
19. The acceptor does not warrant the;
a. Genuineness of drawers signature.
b. Existence of the payee.
c. Due execution of the instrument.
d. Capacity of the payee to indorse.
Answer: C
20. If the drawee destroys the bill;
a. The bill is considered accepted.
b. The bill is considered dishonored.
c. The bill is discharged.
d. The bill is cancelled.
Answer: A

21. Absence of failure of consideration is a matter of defense against any person

a. Holder in due course
b. Not a holder in due course
c. Who is a holder of the instrument
d. None of the above
Answer: B
22. The following are essential requisites of a negotiable promissory note except
a. Must be written and signed by the drawer
b. Must contain an unconditional promise to pay a sum certain in money
c. Must be payable upon fixed determinable future time.
d. Must be payable to order or bearer
Answer: A
23. Which of the following is not an essential element of a bill of exchange?
a. Must be written and signed by the drawee
b. Must contain an unconditional promise to pay a sum certain in money
c. Must be payable to order or bearer
d. Drawee must be named therein
Answer: A

24. The following are negotiable except

a. Pay to bearer Jose Cruz P 10,000 upon demand, signed by A and
addressed to B
b. Pay to Jose Cruz or bearer P 10,000 upon demand, signed by A and
addressed to B
c. I oblige myself to pay Pedro Reyes or order P 3,000 ten days after day
signed by M as maker.
d. Good to L or order P 5,000 July 1, 2009 signed by M as maker
Answer: A

25. Which of the following is negotiable?

a. I promise to pay Jose Cruz or order P 10,000 or deliver 1 cow 20 days after
date at the option of the holder signed by M as maker
b. Pay to Pedro Reyes or bearer P 10,000 or deliver 1 cow on 4-4-10 at the
option of the drawee, signed by A and addressed to B
c. Pay to Pedro C. Cruz or order P 5,000 out of fund I deposited with you
signed by A and addressed to B
d. I promise to pay K. KHO or order P 10,000 in 5 installments, first installment
August 1, 2009 and every month thereafter, signed by M as maker
Answer: A

26. The following are functions of negotiable instrument; except:

a. Used as substitute for money
b. Medium of credit transactions
c. Medium of exchange for commercial transactions
d. None of them.
Answer: D

27. Which of the following is no an incident in the life of negotiable instrument?

a. a. Issue c. Preparation
b. b. Notice of dishonor d. Negotiation
Answer: C
28. Which of the following is negotiable?
a. Postal money order
b. Certificate of stock
c. Treasury warranty
d. None of them
Answer: D

29. A promissory note is payable to bearer when:

a. It is payable to a person named therein or bearer
b. The only indorsement is blank
c. The name of payee does not support to be the name of a person
d. All of the above
Answer: A

30. The following are considered negotiation except

a. Issue
b. Indorsement plus delivery
c. Delivery
d. None of Them
Answer: D

31. Payable to a specified person.

a. Pay to B or his agent P1,000.

b. Pay to B or his assigns P1,000.
c. Pay to B or his indorses P1,000
d. None of the above

Answer: A

32. Not unconditional order to pay.

a. To pay out of a particular fund.

b. To pay and charge against a particular account
c. Both of a and b
d. None of a and b

Answer: A

33. The following instruments are payable to bearer. EXCEPT

 a. When it is payable to a person named therein or bearer.
b. When the name of the payee does not purport to be the name of any person.
c. When it is payable to the order of a fictitious or non-existing person, and such
fact was known to the person making it so payable.
d. None of the above

Answer: D

34. An indorsement is restrictive which either

a. Prohibits the further negotiation of the instrument.

b. Constitutes the indorsee the agent of the indorser.
c. Vests the title in the indorsee in trust for or to the use of some other person.
d. All of the above
e. None of the above

Answer: D

35. A negotiable instrument note for P10,000 is payable to A or order. A signs his name
at the back and delivers the note to B, B negotiated the note to C by mere delivery.

a. Title is not transferred to C because B did not indorse to C

b. C is the mere agent of B
c. C becomes the holder by mere delivery
d. C cannot negotiate by delivery to D.

Answer: C

36. Payable to bearer

a. Pay to bearer B P1,000

b. Pay to B, the bearer, P1,000
c. Pay to possessor P1,000
d. All of the above

Answer: C

37. If the drawee destroys the bill,

a. The bill is considered accepted.

 b. The bill is considered dishonored.
c. The bill is discharged.
d. The bill is cancelled.

Answer: A

38. When a negotiable instrument has been dishonored by non-acceptance or non-

payment, notice of dishonor must be given to the following, otherwise they are
discharged.

a. Maker
b. Drawer
c. Drawee
d. Acceptor

Answer: B

39. The sum payable is a sum certain, although it is to be paid.

a. With interest
b. By stated installments.
c. With exchange
d. With costs of collection or an attorneys fee, in case payment shall not be made
at maturity.

Answer: E

40. An indorsement where the indorser adds the phrase without recourse is called:

a. Blank indorsement
b. Restrictive indorsement
c. Qualified indorsement
d. Conditional indorsement

Answer: C