Comprehensive Business Law – Test bank
b b b b b
1. Thebdifferencebbetweenbnegotiationbandbassignmentbarebthatbnegotiationbrefersbonlybtobnegot
iablebinstrumentsbwhilebassignmentbrefersbgenerallybtobanbordinarybcontract.bNegotiationbisbgov
ernedbbybNegotiablebInstrumentsbLawbwhilebassignmentbisbgovernedbbybtheblawsbonbassignme
ntbofbcreditsbofbthebnewbCivilbCode
a. Bothb statementsb areb false
b. Firstbstatementbisbtrue,bSecondbisbfalse
c. Firstbstatementbisbfalse,bSecondbisbfalse
d. Botheb statementsb areb true
➢ Ans.bD
2. Threebofbthebfollowingbarebrequirementsbofbabvalidbindorsement.bWhichbonebisbnot?
a. Thebindorsementbmustbbebwrittenbonbthebinstrumentbitselfborbuponbabpaperbattachedbthereto
b. Itbmustbbebcompletedbbybdelivery
c. Theb indorsementb shouldb notb containb anyb conditionsb orb restrictions
d. Itbmustbbebanbindorsementbofbthebentirebinstrument
➢ Ans.bC
3. Threebofbthebfollowingbarebtheblegalbeffectsbofbthebdeliverybofbanborderbinstrumentbwithou
tbindorsement.bWhichbonebisbnot?
a. Theb transferb operatesb asb anb ordinaryb assignmentb andb theb transfereeb acquiresb theb instrument
subjectbtoballbdefenses,brealborbpersonal
b. Thebtransfereebacquiresballbthebrightsbofbabholder
c. Thebtransfereebcanbdemandbfrombthebtransferorbthatbthebinstrumentbbebproperlybindorsedbt
obhim
d. ThebtransfereebisbnotbabholderbasbdefinedbunderbthebNegotiablebInstrumentsbLaw
➢ Ans.bB
4. Inbcasebofbundeliveredbandbincompletebinstruments,babmakerbisbstillbliablebthereon.bThebindorse
mentbofbabminorbdoesbnotbmakebhimbliablebonbthebinstrument,balthoughbsuchbindorsementbpasse
sbtitleboverbthebinstrument
a. Firstbstatementbisbtrue,bSecondbisbfalse
b. Firstbstatementbisbfalse,bSecondbisbtrue
c. Bothb statementsb areb true
d. Bothb statementsb areb false
➢ Ans.bB
5. Inbthreebofbthebfollowing,babpersonbwhosebsignaturebdoesbnotbappearbinbthebinstrument,bI
sbnonethelessbliable.bWhichbisbnot?
a. Wherebabpersonbsignsbinbabtradeborbassumedbname
b. Thebforger,binbcasesbofbforgerybofbinstruments
c. Abpersonbwhobnegotiatesbbybdeliverybisbliablebtobhisbimmediatebtransferee
d. Abpersonb whoseb signatureb wasb forged
➢ Ans.bD
6. Abholderbhasbnobrightbtobsuebonbthebinstrumentbinbhisbownbname.bHowever,bhebmaybreceiv
ebpayment,bandbifbthebpaymentbisbinbduebcourse,bthebinstrumentbisbdischarged
a. Bothbstatementsbareb true
b. Bothbstatementsbareb false
c. Firstbstatementbisbtrue,bSecondbisbfalse
d. Firstbstatementbisbfalse,bSecondbisbtrue
➢ Ans.bD
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,7. Threebofbthebfollowingbarebpersonalbdefenses.bWhichbonebisbnot?
a. Wantbofbdeliverybofbanbincompletebinstrument
b. Wantbofbdeliverybofbabcompletebinstrument
c. Acquisitionb ofb anb instrumentb byb unlawfulb means
d. Fillingbupbofbwrongbdate
➢ Ans.bA
8. Whenbabsignaturebinbanbinstrumentbdoesbnotbindicatebinbwhatbcapacitybabpersonbhadbintendedbt
obsigh,bthebpersonbwhosebsignaturebappearsbonbthebinstrumentbisbdeemedbtobbe:
a. Drawer
b. Drawee
c. Indorser
d. Indorsee
➢ Ans.bC
9. AbissuedbabnegotiablebnotebtobB.bBbindorsedbitbtobC,babminor.bCbindorsedbtobDbandbDbtobE.bWhobw
illbbebliablebtobE,bifbAbwillbdishonorbthebnote
a. OnlybDbbeingbthebimmediatebtransferor
b. B,bC,bandbDbbeingbsecondarybparties
c. OnlybBbandbD,bCbisbnotbliablebbeingbabminor
d. OnlybB,bbeingbtheboriginalbpayee
➢ Ans.bC
10. Onebofbthebfollowingbisbnotbabrequisitebforbthebnegotiabilitybofbabpromissorybnote:
a. Thebpromissorybnotebmustbbebinbwritingbandbsignedbbybthebmaker
b. Thebpromissorybnotebmustbbebpayablebonbdemandborbatbabfixedborbdeterminablebfuturebtime
c. Thebpromissorybnotebmustbbebpayablebtobabspecifiedbpersonbnamedbtherein
d. Thebpayeebofbabpromissorybnotebpayablebtoborderbmustbbebnamedborbotherwisebindicate
dbthereinbwithbreasonablebcertainty
➢ Ans.bC
11. Whichbofbthebfollowingbinstrumentsbisbnonfinegotiable?
a. Abbillbofbexchangebwrittenbwithbthebusebofbabpencil
b. Abbillbofbexchangebwrittenbonbabwall
c. Abpromissorybnotebwrittenbonbabpiecebofbcloth
d. Abpromissorybnotebsignedbwithbabmark
➢ Ans.bB
12. Onebofbthebfollowingbisbnotbabnegotiablebinstrument:
a. Treasurybwarrant
b. Bond
c. Certificateb ofb deposit
d. Banker’sbacceptance
➢ Ans.bA
13. Whichbofbthebfollowingbinstrumentsbisbnotbpayablebwithbabsumbcertainbinbmoneybandbis,btherefor
e,bnonfinegotiable?
a. “Ib promiseb tob payb bearerb₱25,000b plusb interestb atb theb endb ofbtheb currentb calendarbyear.”
b. “PaybtobPb orborderb₱25,000binbinstallment.”
c. “IbpromisebtobpaybPborborderb$500bwithbexchangebatbthebcurrentbrate.”
d. “Ibpromisebtobpaybbearerb₱25,000bonborbbeforebDecemberb31bofbthisbyear,bwithb10%battorney’
sbfeebandbcostsbofbcollectionbinbcasebofbdefault.”
➢ Ans.bB
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b b b b b
1. Thebdifferencebbetweenbnegotiationbandbassignmentbarebthatbnegotiationbrefersbonlybtobnegot
iablebinstrumentsbwhilebassignmentbrefersbgenerallybtobanbordinarybcontract.bNegotiationbisbgov
ernedbbybNegotiablebInstrumentsbLawbwhilebassignmentbisbgovernedbbybtheblawsbonbassignme
ntbofbcreditsbofbthebnewbCivilbCode
a. Bothb statementsb areb false
b. Firstbstatementbisbtrue,bSecondbisbfalse
c. Firstbstatementbisbfalse,bSecondbisbfalse
d. Botheb statementsb areb true
➢ Ans.bD
2. Threebofbthebfollowingbarebrequirementsbofbabvalidbindorsement.bWhichbonebisbnot?
a. Thebindorsementbmustbbebwrittenbonbthebinstrumentbitselfborbuponbabpaperbattachedbthereto
b. Itbmustbbebcompletedbbybdelivery
c. Theb indorsementb shouldb notb containb anyb conditionsb orb restrictions
d. Itbmustbbebanbindorsementbofbthebentirebinstrument
➢ Ans.bC
3. Threebofbthebfollowingbarebtheblegalbeffectsbofbthebdeliverybofbanborderbinstrumentbwithou
tbindorsement.bWhichbonebisbnot?
a. Theb transferb operatesb asb anb ordinaryb assignmentb andb theb transfereeb acquiresb theb instrument
subjectbtoballbdefenses,brealborbpersonal
b. Thebtransfereebacquiresballbthebrightsbofbabholder
c. Thebtransfereebcanbdemandbfrombthebtransferorbthatbthebinstrumentbbebproperlybindorsedbt
obhim
d. ThebtransfereebisbnotbabholderbasbdefinedbunderbthebNegotiablebInstrumentsbLaw
➢ Ans.bB
4. Inbcasebofbundeliveredbandbincompletebinstruments,babmakerbisbstillbliablebthereon.bThebindorse
mentbofbabminorbdoesbnotbmakebhimbliablebonbthebinstrument,balthoughbsuchbindorsementbpasse
sbtitleboverbthebinstrument
a. Firstbstatementbisbtrue,bSecondbisbfalse
b. Firstbstatementbisbfalse,bSecondbisbtrue
c. Bothb statementsb areb true
d. Bothb statementsb areb false
➢ Ans.bB
5. Inbthreebofbthebfollowing,babpersonbwhosebsignaturebdoesbnotbappearbinbthebinstrument,bI
sbnonethelessbliable.bWhichbisbnot?
a. Wherebabpersonbsignsbinbabtradeborbassumedbname
b. Thebforger,binbcasesbofbforgerybofbinstruments
c. Abpersonbwhobnegotiatesbbybdeliverybisbliablebtobhisbimmediatebtransferee
d. Abpersonb whoseb signatureb wasb forged
➢ Ans.bD
6. Abholderbhasbnobrightbtobsuebonbthebinstrumentbinbhisbownbname.bHowever,bhebmaybreceiv
ebpayment,bandbifbthebpaymentbisbinbduebcourse,bthebinstrumentbisbdischarged
a. Bothbstatementsbareb true
b. Bothbstatementsbareb false
c. Firstbstatementbisbtrue,bSecondbisbfalse
d. Firstbstatementbisbfalse,bSecondbisbtrue
➢ Ans.bD
,
,7. Threebofbthebfollowingbarebpersonalbdefenses.bWhichbonebisbnot?
a. Wantbofbdeliverybofbanbincompletebinstrument
b. Wantbofbdeliverybofbabcompletebinstrument
c. Acquisitionb ofb anb instrumentb byb unlawfulb means
d. Fillingbupbofbwrongbdate
➢ Ans.bA
8. Whenbabsignaturebinbanbinstrumentbdoesbnotbindicatebinbwhatbcapacitybabpersonbhadbintendedbt
obsigh,bthebpersonbwhosebsignaturebappearsbonbthebinstrumentbisbdeemedbtobbe:
a. Drawer
b. Drawee
c. Indorser
d. Indorsee
➢ Ans.bC
9. AbissuedbabnegotiablebnotebtobB.bBbindorsedbitbtobC,babminor.bCbindorsedbtobDbandbDbtobE.bWhobw
illbbebliablebtobE,bifbAbwillbdishonorbthebnote
a. OnlybDbbeingbthebimmediatebtransferor
b. B,bC,bandbDbbeingbsecondarybparties
c. OnlybBbandbD,bCbisbnotbliablebbeingbabminor
d. OnlybB,bbeingbtheboriginalbpayee
➢ Ans.bC
10. Onebofbthebfollowingbisbnotbabrequisitebforbthebnegotiabilitybofbabpromissorybnote:
a. Thebpromissorybnotebmustbbebinbwritingbandbsignedbbybthebmaker
b. Thebpromissorybnotebmustbbebpayablebonbdemandborbatbabfixedborbdeterminablebfuturebtime
c. Thebpromissorybnotebmustbbebpayablebtobabspecifiedbpersonbnamedbtherein
d. Thebpayeebofbabpromissorybnotebpayablebtoborderbmustbbebnamedborbotherwisebindicate
dbthereinbwithbreasonablebcertainty
➢ Ans.bC
11. Whichbofbthebfollowingbinstrumentsbisbnonfinegotiable?
a. Abbillbofbexchangebwrittenbwithbthebusebofbabpencil
b. Abbillbofbexchangebwrittenbonbabwall
c. Abpromissorybnotebwrittenbonbabpiecebofbcloth
d. Abpromissorybnotebsignedbwithbabmark
➢ Ans.bB
12. Onebofbthebfollowingbisbnotbabnegotiablebinstrument:
a. Treasurybwarrant
b. Bond
c. Certificateb ofb deposit
d. Banker’sbacceptance
➢ Ans.bA
13. Whichbofbthebfollowingbinstrumentsbisbnotbpayablebwithbabsumbcertainbinbmoneybandbis,btherefor
e,bnonfinegotiable?
a. “Ib promiseb tob payb bearerb₱25,000b plusb interestb atb theb endb ofbtheb currentb calendarbyear.”
b. “PaybtobPb orborderb₱25,000binbinstallment.”
c. “IbpromisebtobpaybPborborderb$500bwithbexchangebatbthebcurrentbrate.”
d. “Ibpromisebtobpaybbearerb₱25,000bonborbbeforebDecemberb31bofbthisbyear,bwithb10%battorney’
sbfeebandbcostsbofbcollectionbinbcasebofbdefault.”
➢ Ans.bB
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