REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

1. Who among the following is considered as primarily liable in a negotiable instrument?

a. Maker

b. Drawer

c. Indorser

d. Drawee

2. A statement of the transaction that gave rise to the instrument

a. Renders an instrument non-negotiable

b. Does not render an instrument negotiable

c. Renders an instrument semi-negotiable

d. Does not render an instrument non-negotiable

3. Assuming that the other requisites for negotiability are present, the following instrument, to wit: Pay to Yankee or order P10,000.00 to be debited against payable. Sgd. Xylee To: Alpha

a. Is negotiable because the order is unconditional though indicated a particular account to be debited with the amount.

b. Is not negotiable because it is chargeable against Accounts Payable

c. Is negotiable with an indication of a particular fund out of which reimbursement is to be made

d. Is not negotiable because there is an implied condition

e. None of the above

4. To: Alec Pay to Peter or assign P10,000.00 and charge the same to my account or to my share in our partnership profits. Sgd. Dar

a. Non-negotiable because payment depends on the availability of the profit

b. Non-negotiable because it is not payable at a determinable future time

c. Non-negotiable because it is not payable to order or to bearer

d. Non-negotiable because there is no unconditional order to pay

e. Negotiable

5. I, Xylee, promise to deliver to Yankee the sum of P5,000 or a pair of dalmatian puppies, at Xylees option.

a. Negotiable because it contains a promise to deliver a sum in money

b. Negotiable because there is an option to deliver money or a pair of dogs at the makers option

c. Non-negotiable because it was not signed by the maker

d. Non-negotiable because the holder was not given the option to choose which should be delivered to him

e. None of the above

6. Pay to the order of Xylee P1M. Sgd. YankeeTo: The Current Dean of SAMCIS, SLU-Baguio City or The Current Dean of SOL, SLU-Baguio City

a. It is negotiable even if undated

b. It is non-negotiable since the drawees are named in the alternative

c. It is non-negotiable because the drawees are not named

d. It is negotiable since it complied with Section 1, NIL

e. None of the above

7. A drawee is given

a. Twenty-four hours within which to accept a bill and the effectivity of an acceptance, if given, does not retroact to the day presentment for acceptance was made

b. Twenty-four hours within which to accept a bill and the effectivity of an acceptance, if given, does not retroact to the day presentment for payment was made

c. Twenty-four hours within which to accept a bill and the effectivity of an acceptance, if given, retroacts to the day presentment for acceptance was made

d. Twenty-four hours within which to accept a bill and the effectivity of an acceptance, if given, does not retroact to the day of presentment for payment was made

e. None of the above

8. I promise to pay to the order of the bearer P1M. Sgd. Mark. Is the instrument negotiable?

a. No, because there is no word of negotiability

b. Yes, because it is a bearer instrument

c. Yes, because it is an order instrument

d. No, because it is not considered as payable to the order of a specific person

e. None of the above

9. January 22, 2020 - I promise to pay Xylee or order the sum of P1M with interest of 20% per annum. Sgd. June. When is the accrual date of the interest?

a. January 22, 2020

b. One the date of the issuance

c. From the time the holder makes the demand for the payment of interest

d. It depends on the subsequent agreement of the parties

e. None of the above

10. One of the following is not primarily liable on a negotiable instrument.

a. Drawer of a bill

b. Maker of a promissory note

c. Acceptor of a bill of exchange

d. Certifier of a check

e. None of the above

11. What is the liability of a drawee?

a. None, until he accepts the order to pay

b. None, until he is furnished with a notice of dishonor

c. None, until the negotiable instrument is presented to him for acceptance

d. None, until the instrument is dishonored by non-payment

e. None of the above

12. 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 Rey Bau, bearer

d. Pay to Rey Bau or possessor

e. None of the above

13. Negotiable Instruments Law of the Philippines took effect on?

a. February 3, 1911

b. March 4, 1911

c. June 2, 1911

d. February 2, 1911

e. None of the above

14. The following are functions of a Negotiable Instrument, which is the exception?

a. It increases the medium of currency in circulation

b. It is considered as substitute for money

c. It is considered as legal tender

d. It can be used to settle a monetary obligation if acceptable to the oblige

e. None of the above

15. A writes a promissory note in favor of his creditor, B. It says: Subject to my option, I promise to pay B Php1 Million or his order or give Php1 Million worth of cement or to authorize him to sell my house worth Php1 Million. Signed, A. Is the note negotiable?

A. No, because the exercise of the option to pay lies with A, the maker and debtor.

B. No, because it authorizes the sale of collateral securities in case the note is not paid at maturity.

C. Yes, because the note is really payable to B or his order, the other provisions being merely optional.

D. Yes, because an election to require something to be done in lieu of payment of money does not affect negotiability.