SECTION 1
When bill of exchange contains an order to
1. 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
2. An instrument to be negotiable must
conform to the following requirements,
except:
a. It must be in writing and signed by the
maker.
b. It must be payable to order or bearer.
c. It must contain a conditional promise
or order. ( unconditional)
d. It must be payable on demand or at
fixed or determinable future time.
3. Which of the following is not a promise to
pay, and thus will make an instrument non-
negotiable?
a. "I agree to pay P"
b. "I bind myself to pay P"
c. "I oblige myself to pay P"
d. "I acknowledge my debt to P"
SECTION 2
4. The sum to be paid with interest, except:
a. Interest at fixed rate.
b. Interest at increased or reduced rate.
c. Accrual / rate of interest specified.
(not specified)
d. Both A and B
5. Sec. 2 of negotiable instrument Act. No
2031 deals with.
a. Commercial paper
b. Effect of omission date
c. Standardized words of negotiable
d. None of the above
6. An instrument in writing containing an
unconditional undertaking signed by the
maker to pay certain sum of money to, or to
the order of, a certain person or to the
bearer of the instrument.
a. Promissory Note
b. Bill of exchange
c. Check
d. None of the above
SECTION 3
7. Is a written document containing the
signature of the creator that makes an
unconditional promise or order to pay a sum
certain at either a time certain or on
demand;
a. Contract
b. Promissory estoppel
c. Negotiable instruments
d. Negotiable estoppel
8. Sec. 3 of negotiable instrument Act. No
2031 deals with.
a. When promissory note contains a
promise to pay.
b. When instrument payable to bearer.
c. Certainty of time of payment.
d. None of the above
9.
pay, except;
a. Words equivalent to an order to pay
b. Mere request to pay
c. Liability of drawer
d. None of the above
SECTION 4
10. When instrument payable at determinable
future time, except:
a. Payable at a fixed period after sight.
b. Payable at a fixed time.
c. Payable on or before a fixed time.
d. None of the above
11. S1: Under Sec. 4, which is expressed to be
payable at fixed period after the occurrence
of an unspecified event which is certain to
happen, though the time of happening to be
uncertain.
S2: Under Sec. 4, which is expressed to be
payable on or before a fixed or determinable
future time specified therein.
a. Only statement I is true
b. Only statement II is true
c. Statement I and II are true
d. Statement I and II are false
12. Sec. 4 of negotiable instruments Act. No.
2031 deals with.
a. Certainty of sum payable
b. When instrument payable on demand
c. Act in addition to payment of money
d. None of the above
-CALUB, Gina
SECTION 5
13. Which of the following makes an instrument
non-negotiable?
a. It contains a provision for the
performance of any act in addition to
the payment of money.
b. It contains a provision authorizing the
sale of collateral securities.
c. It contains a provision where the holder
is given an election to require something
to be done in lieu of payment of money.
d. None of the above
14. An instrument is non-negotiable under the
Negotiable Instruments Law 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 where the
amount payable shall be debited.
d. None of the above.
15. Which of the following provisions does not
affect the negotiability of an instrument?
a. Waives the benefit of any law intended for
the advantage or protection of the obligor.
b. Gives the holder an election to require
something to be done in lieu of the payment
of money.
c. A and B
d. None of the above
SECTION 6
16. The validity and negotiable character of an
instrument are not affected by the fact that:
I. It is not dated.
II. Does not specify the value given, or
that any value has been given
therefore.
III. The acceptance must be shown to
the person to whom the instrument
is negotiated.
a. I, II and III
b. I and II
c. I only
d. II only
17. Which of the following is/are true.
a. The date in the bill or note is
generally not necessary.
b. The omission of the date will not
make the instrument non-negotiable
c. If there is a date stated, but there is
no such date in the calendar, the
law will deem the nearest date of
the month the date intended.
d. All of the above
18. If there is no place specified.
a. The instrument is not negotiable
b. It is presumed to be at the
principal place.
c. No valid consideration is presumed.
d. The instrument is payable on
demand.
SECTION 7
19. When is the instrument payable on
demand?
a. When the place is specified.
b. When the instrument is not negotiable.
c. When it is a particular kind of money.
d. When it is expressed to be so
payable
20. When no time for payment is expressed:
a. “ Pay to P or order 10,000 on August
20,2016”
b. “ Pay to P or order 10,000 on August
20,2017”
c. “Pay to P or order 10,000.”
d. None of the above.
21. Where an instrument is indorsed when
overdue:
a. The liability in the instrument is
discharged.
b. It is as regards that the person
indorsing it, payable on demand.
c. A and B
d. None of the above.
SECTION 8
22. Which of the following is not payable to
order?
a. “ I promise to pay 10,000 to the order of
P”
b. “Pay to the order of P 10,000”
c. “Pay to the order of myself of 10,000.”
d. “Pay to P or his agent 10,000.”
23. Which of the following is payable to the
order of several payees:
STATEMENT 1: “Pay to the order of yourself
10,000.”
STATEMENT 2: “Pay to the order of P and
A 10,000.”
STATEMENT 3: “Pay to the order of P, A or
B 10,000.”
a. Statements 1 and 2
b. Statements 1, 2 and 3
c. Statement 3 only.
d. Statement 2 only.
24. When payable to order. The instrument is
payable to the order of:
a. The drawer
b. The drawee
c. A payee who is not maker or drawer, or
drawee.
d. All of the above
-GAHID, Kelly
SECTION 9
25. The instrument is payable to bearer, except:
a. When the only or last indorsement is
a special indorsement.
b. When it is expressed to be so payable
c. When it is payable to a person named
therein or bearer.
d. When it is payable to the order or a
fictitious or non-existing person
26. STATEMENT 1: Once a bearer instrument,
always a bearer instrument.
STATEMENT 2: A bearer instrument
becomes an order instrument if it has been
specially indorsed.
a. Only statement I is true
b. Both statements are true
c. Only statement 2 is true
d. Both statements are false
27. STATEMENT 1: An instrument that fails to
qualify as an order instrument is
nonetheless negotiable if it is payable to
bearer.
STATEMENT 2: Bearer means the person in
possession of a bill or note which is payable
to bearer.
a. Only statement I is true
b. Both statements are true
c. Only statement 2 is true
d. Both statements are false
SECTION 10
28. Assuming all the other requisites of
negotiability are present, which of the
following instruments is not payable to
bearer?
a. “Pay to the order of cash”
b. “Pay to the order of Jose Rizal, national
hero”
c. “Pay to Pedro Penduko, bearer.”
d. “Pay to Pedro Penduko or bearer.”
 29. STATEMENT 1: The substance of the
transaction rather than its form is the
criterion of negotiability.
STATEMENT 2: Instead of using “promise”
the words “bind myself” may be used.
a. Only statement I is true
b. Both statements are true
c. Only statement 2 is true
d. Both statements are false
30. STATEMENT 1: It is advisable in most
cases to conform to the forms prescribed by
law in order to avoid uncertainty.
STATEMENT 2: It is required to use the
exact words of the law to make it negotiable.
a. Only statement I is true
b. Both statements are true
c. Only statement 2 is true
d. Both statements are false
SECTION 11
31. STATEMENT 1: Generally, a date is not
essential to make the instrument negotiable.
STATEMENT 2: If the instrument bears a
date, it is presumed that said date is the
date when it was made by the maker, drawn
by the drawer, accepted by the drawee, or
indorsed by the payee of holder.
a. Only statement I is true
b. Both statements are true
c. Only statement 2 is true
d. Both statements are false
32. I promise to pay P or his order the sum of
10,000 30 days after the death of X, this
instrument is payable:
a. At a determinable future time
b. On Demand
c. Upon the fulfilment of a condition
d. At an indefinite time, hence, non-
negotiable
33. STATEMENT 1: The date is necessary to
determine the maturity.
STATEMENT 2: The date is necessary to
determine negotiability.
a. Only statement I is true
b. Both statements are true
c. Only statement 2 is true
d. Both statements are false
- LABONETE, Freddielyn B.
SECTION 12
34. An instrument issued on August 30, 2017
but is dated August 15, 2017.
a. Post-dated
b. Ante-dated
c. Pre-dated
d. Past-dated
35. An instrument was issued on August 15,
2017, but bears a date of August 30, 2017.
a. Post-dated
b. Ante-dated
c. Pre-dated
d. Past-dated
36. If the ante-dating or post-dating is done for
an illegal or fraudulent purpose.
a. The instrument is void
b. The instrument is voidable
c. The instrument is enforceable
d. The instrument is rendered invalid
SECTION 13
37. The insertion of a wrong date does not avoid
the instrument in the hands of a subsequent
a. Holder in due course
b. Holder
c. Holder for value
d. Maker
38. Where an instrument expressed to be
payable at a fixed period after date is issued
undated, or where the acceptance of an
instrument payable at a fixed period after
sight is undated.
a. Any holder may insert therein the
true date of issuance or acceptance
b. Any holder may not insert therein the
true date of issuance or acceptance
c. Any holder in due course may insert
therein the true date of issuance or
acceptance
d. Any holder in due course may not insert
therein the true date of issuance or
acceptance
39. “I promise to pay P (no date) or order
P10,000 30 days after date. (Sgd.) M
a. The true date may be inserted only by P
b. The true date may be inserted not
only P but also by any holder after
him.
c. The true date may be inserted not only
P but also by any holder in due course
after him.
d. The true date may be inserted only by M
SECTION 14
40. The defense that the instrument had not
been filled up in accordance with the
authority given and within a reasonable time
is not available as against a holder in due
course.
a. Right of holder in due course
b. Right of holder for value
c. Right of a holder
d. Right of the maker
41. It may be defined as any particular proper to
be inserted in a negotiable instrument to
make it complete, and the power to fill in the
blanks extends, therefore, to every complete
feature of the instrument.
a. Instrument particular
b. Completion of negotiable instrument
c. Material particular
d. Power of negotiable instrument
42. Suppose M issue a note to P with the space
for the date left blank in payment for goods
purchased by M from P.
a. This gives M the authority to fill up the
blank.
b. This gives P prima facie authority to
fill up the blank
c. This gives M prima facie authority to fill
up the blank
d. P does not have the authority to fill up
the blank
SECTION 15
43. The fact that an incomplete instrument,
completed without authority, had not been
delivered.
 a. Is a defense even against a holder in
due course
b. Is not a defense against a holder in due
course
c. Is a defense even against a holder for
value
d. Is not a defense even against a holder
for value
44. Where an incomplete instrument has not
been delivered it will not, if completed and
negotiated without authority.
a. Be a valid contract in the hands of
any holder, as against any person
whose signature was placed thereon
before delivery
b. Not be a valid contract in the hands of
any holder
c. Be a valid contract in the hands of any
holder in due course
d. Not be a valid contract in the hands of
any holder in due course
45. Suppose M makes a note for P10,000 with
the name of the payee in blank and keeps it
in his drawer. P steals the note and inserts
his name as payee and then indorses the
note to A, A to B, B to C, and C to D, a
holder in due course.
a. D can enforce the note against M
b. D cannot enforce the note against M
c. D can enforce the note against P
d. D can enforce the note against the
subsequent parties
-NOVEDA, Sydrick
SECTION 20
58. If the agent signs a note or bill in his own
name and discloses no principal.
a. He is personally bound, and evidence
to the contrary may not be admitted
to relieve him from personal liability.
b. He is not personally bound, and
evidence to the contrary may not be
admitted to relieve him from personal
liability.
c. He is personally bound, and evidence to
the contrary may be admitted to relieve
him from personal liability.
d. He is not personally bound, and
evidence to the contrary may be
admitted to relieve him from personal
liability.
59. Where an officer of a corporation or other
organization signs for the latter, his
representative capacity is sufficiently shown
by?
a. Signature only
b. Signature followed by the title of his
office and the name of the of the
corporation or organization
c. Signature followed by his contact
number
d. Signature followed by the title of his
office and the name of the of the
corporation or organization not
necessary
60. In order that an agent who signs a
negotiable instrument may escape personal
liability, which of the following is true?
a. He is duly authorized
b. He adds words to his signature
indicating that he signs as an agent, that
is, for or on behalf of a principal, or in a
representative capacity
c. He discloses his principal
d. All of the above
SECTION 21
61. It is the act by which a principal gives power
to another to act in his place as he could
himself?
a. Procuration
b. Allonge
c. Forgery
d. Issuance
62. What is the special and technical meaning
has the term “procuration”?
a. It gives a warning that the agent has
but a limited authority
b. It gives a warning that the agent has but
a unlimited authority
c. It gives a warning that the agent has no
authority
d. None of the above
63. What if the agent has exceeded the actual
limits of his authority?
a. The principal is bound
b. The principal is not bound
c. The principal and the agent are bound
d. None of the above
SECTION 22
64. The contracts entered into by a minor are?
a. Voidable
b. Unavoidable
c. Considered
d. Excluded
65. M issues a negotiable instrument payable to
the order of P, a minor. P indorses the
instrument to A. M becomes liable to A
because the indorsement by P passes title
to A. But if M cannot pay and A sues P.
What may the latter do?
a. The latter may raise the defense of
minority to escape liability. And P
may even disaffirm his indorsement
and recover the instrument from A.
b. The latter may not raise the defense of
minority to escape liability. And P may
even disaffirm his indorsement and
recover the instrument from A.
c. The latter may raise the defense of
minority to escape liability. And P may
even affirm his indorsement and recover
the instrument from A.
d. The latter may not raise the defense of
minority to escape liability. And P may
even affirm his indorsement and recover
the instrument from A.
 66. What is the act of indorsement or
assignment of minor or corporation
performing?
a. Bona fide
b. Ulta vires
c. Procuration
d. Forgery

SECTION 23

67. It is the counterfeit- making or fraudulent

alteration of any writing, and may consist in
the signing of another’s name or the
alteration of an instrument in the name,
amount, description of the person and the
like, with intent thereby to defraud
a. Forgery
b. Bona fide
c. Procuration
d. Genuine

68. Where the payee’s signature is forged,

payments made by the drawee bank to
collecting bank is?
a. Effective
b. Ineffective
c. Operative
d. Capable

69. When the rule on forgery under Section 23

does applies only?
a. To a signature that is forged or made
with the authority of the person whose
signature it purports to be
b. To a signature that is forged or made
without the authority of the maker
c. To a signature that is forged or made
without the authority of the person
whose signature it purports to be
d. To a signature that is forged or made
with the authority of the maker

-VALDEZ, Loren Kate S.