Negotiable Instruments

While a check is a one time payment, a Promissory Note is a promise made to pay back a loan, either in installments or at a later date

• True

• False

Checks can be crossed to ensure the safety against theft or loss of checks, on the other hand, there is no such feature as crossing for Bill of Exchange

• True

• False

While the Bill of Exchange can be drawn in copies, the Promissory Note cannot be drawn in copies.

• True

• False

How many parties are normally involved when using a check?

• Three

• Five

• Two

• One

Which of the following negotiable instruments CANNOT be drawn on copies?

• Check

• Draft

• Bill of exchange

• Promissory note

Which of the following is NOT a requirement for negotiability?

• Must be signed

• Must contain a condition to payment

• Must be for an exact amount of money

• Must be written

Which of the following is the act of a person who is the holder of a negotiable instrument signing his or her name on the instrument, thereby transferring title or ownership?

• Discharge

• Bearer

• Endorsement

• Bearer

Which of the following is NOT an example of material alteration?

• Altering the amount listed on the check

• Changing the date on a check

• Tearing a check out of a check book

• Editing the name of the payee

Which of the following types of discharge involves the holder of an instrument at or after its maturity absolutely and unconditionally renouncing in writing and giving up their right against all the parties to the instrument?

• By express waiver

• By material alteration

• By payment in due course B.

• By cancellation

Which of the following is an example of a real defense?

• Failure of a condition

• Unauthorized completion

• Prior payment

• Void contract