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ACCTG 25 Negotiable Instruments Law: Lyceum-Northwestern University

This document contains a midterm examination for an accounting course on negotiable instruments law. The exam contains multiple choice and true/false questions testing understanding of key concepts like what makes an instrument negotiable, the roles and liabilities of parties to negotiable instruments like promissory notes and bills of exchange, and other legal aspects of negotiable instruments. It provides the name of the student taking the exam, scores areas for their answers, and asks the student to choose the best answer or mark statements as true or false for 33 questions testing their knowledge of negotiable instruments.

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Amie Jane Miranda
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66 views4 pages

ACCTG 25 Negotiable Instruments Law: Lyceum-Northwestern University

This document contains a midterm examination for an accounting course on negotiable instruments law. The exam contains multiple choice and true/false questions testing understanding of key concepts like what makes an instrument negotiable, the roles and liabilities of parties to negotiable instruments like promissory notes and bills of exchange, and other legal aspects of negotiable instruments. It provides the name of the student taking the exam, scores areas for their answers, and asks the student to choose the best answer or mark statements as true or false for 33 questions testing their knowledge of negotiable instruments.

Uploaded by

Amie Jane Miranda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

L-NU AA-23-02-01-18

LYCEUM-NORTHWESTERN UNIVERSITY
Tapuac District, Dagupan City

COLLEGE OF BUSINESS EDUCATION

MIDTERM EXAMINATION – ACCTG 25 Negotiable Instruments Law


Summer, AY 2020– 2021 (Tutorial)
Prepared by: Amie Jane R. Miranda, CPA

Name:_____________________________________ Score:____________________

Student No.: _______________ Year/Section:___________ Date of Exam: ____________


I. MULTIPLE CHOICES. Choose the best answer from the choices and encircle your answer. Strictly “NO
ERASURES”.
1. An instrument which is not dated will be considered dated as at the time of:
a. Acceptance
b. First indorsement
c. Last indorsement
d. Issuance
2. “I promised to pay P or his order the sum of P10,000.00 30 days after the death of X”. This an
instrument payable:
a. At a determinable future time
b. On demand
c. Upon the fulfillment of a condition
d. At an indefinite time, hence, non negotiable
3. Who among the following is the holder of a negotiable instrument originally payable to order?
a. The original payee who has negotiated the instrument
b. The indorsee who in in possession of the instrument
c. The possessor of the instrument to whom the instrument was delivered without any
instrument
d. The indorsee who negotiated the instrument
4. The following instruments are presented to you for evaluation:
I. “Pay to the order of Pablo Patricio P 20,000.00”
II. “Pay to the order of Pablo Patricio P 20,000.00 or deliver to him a computer of the same
value at his option”
III. “Pay to the order of Pablo Patricio P 20,000.00 or deliver to him a computer of the same
value”
IV. “Pay to the order of Pablo Patricio a computer worth P 20,000.00”
Assuming all the requisites of negotiability are present which of the foregoing
instruments are negotiable?
a. Instruments I and II
b. Instruments I and III
c. Instruments II and III
d. Instruments III and IV
5. Assuming all 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 Padernal, bearer”
d. “Pay to Pedro Padernal or bearer”
6. Which of the following is a valid address to a drawee so as to make the instrument negotiable?
a. “To Walter Wenceslao or Wilfredo Wycoco”
b. “To Walter Wenceslao, or in his absence, Wilfredo Wycoco”
c. “To Walter Wenceslao and Wilfredo Wycoco”
d. “To Walter Wenceslao and another drawee named Wilfredo”
7. An instruments reads as follows:

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November 30, 2019

I promise to pay to the order of Paolo Pimentel the sum of P 50,000.00 if


he places first in the May 2020 CPA Examination.

(Sgd). Mariano Garcia

a. The instrument is valid and negotiable.


b. The instrument is valid but not negotiable.
c. The instrument is invalid but negotiable.
d. The insrument is invalid and not negotiable.
8. The following are two several requisites of an instrument:
I. The instrument must be payable on demand or at a fixed or determinable future time.
II. The instrument must be payable to order or to bearer.
a. Both requisites apply to promissory notes only
b. Both requisites apply to bills of exchange only
c. Both requisites apply to both promissory notes and bill of exchange.
d. Requisites I applies to promissory notes; Requisites II applies to bills of exchange
9. The attributes of a negotiable instrument which allows it to be passed from one hand to another
similar to money, so as to give a holder indue course the right to hold the instrument free from
defect of title of prior parties, and free from defenses available to prior parties among
themselves, and to enforce payment of the instrument for the full amount thereof against all
parties liable thereon is known as:
a. Assignability
b. Negotiability
c. Transferability
d. Acceptability
10. An instrument is not payable on demand in one of the following cases. Which case is it?
a. When the instrument is expressed to be payable at sight.
b. When the instrument is expressed to be payable upon presentation.
c. When no time for payment is expressed
d. When the instrument is expressed to be payable after the occurrence of a specified event
which is certain to happen.
11. The acceptor, by accepting the instrument, admits the following , except the:
a. Existence of the payee
b. Capacity of the payee to indorse
c. Genuineness of the drawer’s signature
d. Rightof the holder to enforce payment of the instrument
12. 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 acknowledge my debt to P”
d. “I oblige myself to pay P”
13. A check differs from a bill of exchange because check;
a. Does not require the drawer to have funds with the drawee
b. May be drawn against a person other than a bank
c. Is always payable on demand
d. Is required to be presented for acceptance in certain cases
14. A certificate of stock is not negotiable instrument because it lacks which requisite?
a. It must contain an unconditional promise or order to pay a sum certain in money.
b. It must be payable on demand or at fixed or determinable or at a fixed or determinable
future time.
c. It must be payable to order or bearer.
d. It must be in writing and signed by the maker or drawer.
15. Which of the following is not a secondary party?

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a. Acceptor for Honor
b. Drawer
c. Payor for Honor
d. Indorser
16. Which of the following is not necessary in order to make an instrument negotiable?
a. It must be in writing and signed by the maker
b. It must contain an unconditional promise or order to pay a sum certain in money
c. It must be payable on demand or at a fixed future time
d. It must be payable only to a specific person
17. This instrument is negotiable
a. A “I promised to pay X P20,000.00.” (Signed:Y)
b. “Pay X or order P20,000.00 if he marries Z”. (Signed: Y)
c. “Good to X or order P 20,000”. (Signed: Y)
d. D. “I promised to pay X or order 20 cavans of rice in June 2019”. (Signed: Y)
18. Which of the following instruments is negotiable?
a. Pay to bearer C 10,000. Reimbursed yourself out of the rental of my house in Manila. To B;
(Sgd) A
b. Pay to C 10,000 or his order out of the rental of my house in Manila. To; B (Sgd) A
c. Pay to C 10,000 and reimbursed yourself out of the rental of my house in Manila. To B; (Sgd)
A
d. Pay to the order of C 10,000. Reimburse yourself out of the rental of my house in Manila. To
B; (Sgd) A
19. Which of the following is not negotiable?
a. Pay to X or order 10,000 on or before December 1, 2019 (Sgd) E
b. Pay to X or order 10,000 notice of dishonor waived (Sgd) B
c. Pay to X or order 5,000 or deliver two piglets at the option of the holders (Sgd) C
d. Pay to X or order 10,000 and to deliver 10 sacks of rice. (Sgd) D
20. When is a negotiable instrument payable to order?
a. When drawn payable to the order of a specified person or to him or his order.
b. When payable to the order of a fictuitous or non-existing person, and such fact was know to
the person making it
c. When the name of the payee does not purport to be the name of any person
d. When the only or last endorsement is an endorsement in blank.

II. TRUE OR FALSE. Write on the space provided true if the statement is correct otherwise write false if
the statement is incorrect. No erasures.

21. A promissory note should be presented for acceptance to make the maker primarily liable.
22. Check must be presented for payment within a reasonable time after its last negotiation.
23. “Good to Ella or bearer 10,000. Sgd. Marvin” is non-negotiable
24. In a bill of exchange, the drawer is primarily liable.
25. A check is always payable on demand.
26. The maturity date of a promissory note payable “1 month after date” will be counted 30 days
from the date of issue.
27. A promissory note is discharged upon payment by maker on or before maturity date.
28. An instrument payable only to the order of a specified person is not negotiable.
29. The instrument payable out of a particular fund is non-negotiable.
30. The maker of a promissory note is primarily liable.
31. An instrument payable upon a contingency is non negotiable but the happening of the event will
cure the defect.
32. If the instrument is payable to the order of maker, said third person must indorse the
instrument for negotiation purposes.
33. In case of dobt as to what capacity the person making the instrument intended to sign, he is to
be deemed a drawer.
34. In case of dobt as to what capacity the person making the instrument intended to sign, he is to
be deemed an indorser.

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35. In case of doubt as to whether an instrument is a bill or note, the instrument shall be rendered
non-negotiable.
36. The sum payable is stil certain although it is payable with interest.
37. The sum payable is still certain although it is to be paid with costs of collection incase of non-
payment.
38. An instrument which contains a promise order to pay asum of money which is subject to a
condition is negotiable as long as the condition happens.
39. An instrument where no time for payment is expressed is payable on demand.
40. An instrument payble to a specified person or his agent is payable to order.
ajmiranda
------END-----
Goodluck and Godbless

Reviewed and Checked by:

Dr. Genoveva Y. Reyes, CPA, FRIAcc


Dean, College of Business Education

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