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Answer: A
2. X issued a check in favour of his creditor, Y. It reads Pay to Y the amount of Seven
Thousand Hundred Pesos (Php700 000.00). Signed, X. What amount should be construed as
true in such a case?
a. Php700 000.00
b. Php700.00
c. Php7 000.00
d. Php700 100.00
Answer: A
3. If the drawer and the drawee are the same person, the holder may present the instrument for
payment without need of a previous presentment for acceptance. In such a case, the holder
treats it as a.
a. Promissory note
b. Non-negotiable instrument
c. Letter of credit
d. Check
Answer: A
a. I.O.U
b. Due to X
c. For value received
d. I agree to pay
Answer: D
5. Which of the following endorsers expressly warrants in negotiating an instrument that 1) it is
genuine and true; 2) he has a good title to it; 3) all prior parties have capacity to negotiate; and
4) it is valid and subsisting at the time of his endorsement?
Answer: D
6. Who among the following are liable for warranties as well as secondary liability?
Answer: D
7. D drew a bill of exchange in favour of X or order for P10 000.00. The bill was addressed to D.
The bill was negotiated by X to Y. Which of the following statement is not correct?
Answer: D
a. The check may not be encashed but only deposited in the bank;
b. The check may be negotiated only once to one who has an account with a bank;
c. The check becomes non negotiable
d. It serves as warning to the holder that the check has been issued for a definite purpose
so that he must inquire if he has received the check pursuant to that purpose
Answer: D
Answer: A
10. And B are debtors of C for P2,000,000. As consent was obtained by C thru fraud.
Answer: D
11. Statement 1: The negotiable instrument provides that a holder not in due course cannot
recover on the instruments.
Statement 2: A holder in due course who acquired a bearer instrument from a thief or finder will
have a superior right over the previous holder from whom it is stolen or who has lost it.
Answer: b
12. Pay to C for collection only, Sgd. B is an example of a restrictive type endorsement which
is classified as:
a. Prohibitive type
b. Agency type
c. Trust type
d. All of the above
Answer: b
a. He may receive payment and if the payment is in due course the instrument is
discharged.
b. He may sue on the instrument, in his own name.
c. He cannot recover on the instrument.
d. He is entitled to the instrument but holds it subject to the same defense as if it were non-
negotiable.
Answer: c
14. Which of the following circumstances would prevent a person fro, becoming a holder in due
course of an instrument?
a. The person was notified that one of the prior indorses was discharged.
b. The person was notified that payment was refused
c. The note was a collateral for a loan
d. The note was purchased at a discount
Answer: b
Answer: d
a. Qualified
b. Blank
c. Special qualified
d. Qualified restrictive
Answer: c
17. An instrument payable to bearer may be negotiated through any of the following means,
except:
Answer: d
18. Under the Negotiable Instrument Law, which of the following are real defenses available
against a holder in due course?
Answer: b
19. Which phrase best complete the statement A check which is payable to bearer is a bearer
instrument and:
Answer: a
20. 1st -: An order instrument will always remain and order instrument.
Answer: d
21. 1st Statement The instrument is discharged upon payment by an indorser of a promissory
note at or after maturity date
2nd Statement- The promissory note is discharged upon payment by the accommodation
party at or after maturity.
Ans: C
22. 1st Statement- The acceptor of a bill may refuse to pay the holder on the ground that the
signature of the drawer is forged
2nd Statement- An instrument if not negotiable if it is payable to the order of a fictitious person
Ans: B
a. The check may not be encashed but only deposited in the bank;
b. The check may be negotiated only once-to one who has an account with a bank
c. It serves as warning to the holder that the checks has been issued for a definite purpose
so that he must inquire if he has received the check pursuant to that purpose
d. The check becomes non negotiable.
Ans: D
24. John Dela Rosa issued a promissory note to Celine Cruz on Oct. 24, 2015 as follows:
I promise to pay to the order of Celine Cruz Ten thousand pesos (P100,000) on Oct 20, 2016
with interest of 12% p.aSgd (John Rosa)
In this case:
Ans: B
25. Which of the following stipulations or features of a promissory note (PN) affect IRS
negotiability, assuming that the PN is otherwise negotiable?
Ans: B
26. D drawn a bill of exchange in favor of X or order for P10,000. The bill was address to D. The
bill was negotiated by X to Y. Which of the following statement is not correct?
Ans: C
27. The three most common forms of negotiable instrument are promissory notes, bill of
exchange and check. Which of the following characteristics applies only to a check?
Ans: C
28. The bill was accepted as follows: "Accepted payable to PNB Manila (SGD) X". The
acceptance is?
a. General acceptance
b. Qualified local
c. Qualified conditional
d. Qualified acceptance
Ans: A
29. A bill of exchange for the amount of P10,000 payable to the order of P ten (10) days after
sight was issued by D to P. The bill was specially indorsed from P to A, A to B, B to C, C to D
and D to H, the holder. When H presented it to X, the drawee, it was dishonored by non-
acceptance. H sent notice of dishonor to the drawee and all indorsers. Which of the following
statements is incorrect:
Ans: C
Ans: C
31. A negotiable instrument must contain a promise or order to pay a sum certain in money,
except
Answer: D
Answer: D
Answer: D
Answer: B
B. Such holder may enforce it as if it had been filled up strictly in accordance with the authority
given and within a reasonable time.
Answer: B
36.Where an incomplete instrument has not been delivered ,it will not ,if completed and
negotiated without authority , be a valid contract as against any person whose signature was
placed thereon before delivery in the hands of a;
a. Holder in due course
b. Holder not in due course
c. Holder for value
d. Any holder
Answer: D
37. Where this instrument is in the hands of a holder in due course, a valid delivery thereof by
all a party prior to him so as to make them liable is conclusively presumed. This refers to
Answer: C
Answer: C
39. This kind of signature operates as notice that the agent has but a limited authority to sign.
Answer: B
40. When a signature is forged or made without the authority of the person whose signature it
purports to be, it is totally
Answer: B