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
8. An instrument is non-negotiable under the Negotiable Instruments Law (NIL) if
it states:
A. The amount is payable out of a particular fund.
B. There is a stipulation that interest shall be paid.
C. Designates the account out of which reimbursement is to be made.
D. Designates the account where the amount payable shall be debited.
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
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
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