1. The Law regarding negotiable instruments is contained in :
Marks:
the Bill of Exchange Act, 1881
the Banking Regulation Act, 1949
the Cheques Act,1949
the Negotiable Instruments Act, 1881
None of the above
The Correct Answer is :
the Negotiable Instruments Act, 1881
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
2. The characteristic of a negotiable instrument is that :
Marks:
2+ 0.5-
2+ 0.5-
the instrument cannot be transferred by the holder
the instrument can be transferred by the holder subject to defects in the title
the instrument can be transferred free of defects in the title of the holder
none of the above
All of the above
The Correct Answer is :
the instrument can be transferred free of defects in the title of the holder
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
3. A negotiable instrument is defined by :
Marks: 2+ 0.5Section 1 of the N. I. Act, 1881
Section 5 of the N. I. Act. 1881
Section 13 of the N. I. Act. 1881
Section 19 of the N. I. Act, 1881
None of the above
The Correct Answer is :
Section 13 of the N. I. Act. 1881
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
4. Which of the following is not a negotiable instrument as per the N. I. Act, 1881 ?
A bearer cheque.
A cheque marked Payee Account
A cheque marked Not Negotiable
A promissory note.
All of the above
The Correct Answer is :
A cheque marked Not Negotiable
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
5. Holder of a negotiable instrument :
Marks: 2+ 0.5can cross a cheque
can transfer the instrument.
can sue in his own name
All of the above
(a) and (b) above
The Correct Answer is :
All of the above
You did not answer the question.
Marks:
2+ 0.5-
Explanation :
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Module : Module B
Chapter : Chapter3
6. Which of the following statements in true ?
Marks:
2+ 0.5-
Holder in due course can sue in his own name.
Holder in due course can acquire a better title than that of the tansferer.
Holder in due course can negotiable the instrument.
All of the above
None of the above
The Correct Answer is :
All of the above
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
7. A minor is not competent to :
Marks: 2+ 0.5draw a negotiable instrument
endorse a negotiable instrument
be a drawee of a negotiable instrument
be a payee of a negotiable instrument
None of the above
The Correct Answer is :
be a drawee of a negotiable instrument
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
8. When a cheque has been obtained by way of gift the person becomes :
Marks:
2+ 0.5-
a holder.
a holder for value.
a holder in due course.
None of these
(a) and (b)
The Correct Answer is :
a holder.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
9. No protection is available to the holder in due course of a cheque on account of :
forged endorsement
irregularity of endorsement
defect in the title of the previous holder
All of the above
None of the above
The Correct Answer is :
forged endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
10. Issue of promissory note payable to bearer is prohibited under:
Section 31 of the N. I. Act, 1881
Section 31 of the R.B.I. Act, 1934
Section 31 of the B.R. Act, 1949
Marks:
2+ 0.5-
Marks:
2+ 0.5-
Section 31 of the Bills of Exchange Act, 1956
None of the above
The Correct Answer is :
Section 31 of the R.B.I. Act, 1934
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
11. The process of transferring a negotiable instrument to any person making him the holder of the instrument
is known as :
Marks: 2+ 0.5endorsement
negotiation
crossing
None of the above
a) and (c)
The Correct Answer is :
endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
12. case of dishonour of an instrument endorsed 'Sans Recourse: '
Marks:
2+ 0.5-
endorse is not liable
endorser is not liable
payee is not liable
drawee is not liable.
None of the above
The Correct Answer is :
drawee is not liable.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
13. An instrument the part payment of which has already been made can be endorsed further :
0.5for the remaining sum
or the entire sum
statement is not correct
None of these
Any of the above
The Correct Answer is :
None of these
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
14. Endorsement after maturity of the instrument is :
valid
invalid
impossible
valid subject to the defects in the title of the endorser
None of the above
The Correct Answer is :
invalid
You did not answer the question.
Explanation :
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Marks:
2+ 0.5-
Marks:
2+
Module : Module B
Chapter : Chapter3
15. A minor is competent to endorse an instrument:
Marks:
2+ 0.5-
subject to approval of the guardian
without incurring of all liability
with the consent of all parties
the statement is not true
None of the above
The Correct Answer is :
without incurring of all liability
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
16. A cheque was payable to Mr. Ramesh Mehta or order. Mr. Mehta endorsed it in favour of Mr. Kripal Singh
but Mr. Mehta died before it could be delivered to Mr. Kripal Singh. What is the course available to the legal
heirs of Mr. Mehta ?
Marks: 2+ 0.5They cannot complete the negotiation by delivery.
They can complete the negotiation by delivery.
They can cancel the endorsement and re-endorse it to Mr. Kripal Singh.
They can cancel the endorsement and complete the negotiation by mere delivery to Mr. Kripal Singh.
None of the above
The Correct Answer is :
They cannot complete the negotiation by delivery.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
17. An order instrument endorsed in blank, can be further negotiated by :
Marks: 2+ 0.5making it an endorsement in full
mere delivery
endorsement by the last holder
endorsement by the last holder and delivery
None of the above
The Correct Answer is :
mere delivery
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
18. When the endorser waives the notice of dishonour, it is called :
facultative endorsement
restrictive endorsement
endorsement s recourse
conditional endorsement
None of the above
The Correct Answer is :
facultative endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
19. Which of the following is a Sans Recourse endorsement ?
Pay to Shri M.L. Gupta without my liability.
Pay to Shri M.L. Gupta notice of dishonour waived.
Pay to Shri M. L. Gupta for my use.
Marks:
Marks:
1+ 0.25-
2+ 0.5-
Pay to Shri M. L. Gupta when he visits Mumbai..
None of the above
The Correct Answer is :
Pay to Shri M.L. Gupta without my liability.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
20. Which of the following is a restrictive endorsement ?
Marks: 1+ 0.25Pay to Shri M.L. Gupta only.
Pay to Shri M.L. Gupta or order at his risk.
Pay to Shri M.L. Gupta when he visits Mumbai.
Pay to Shri M. L. Gupta or order notice waived.
None of the above
The Correct Answer is :
Pay to Shri M.L. Gupta only.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
21. A cheque bearing the following endorsement should not be paid :
conditional endorsement
partial endorsement
restrictive endorsement
facultative endorsement
All of the above
The Correct Answer is :
partial endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
22. The endorsement on a cheque is valid for a period of :
six months from the date endorsement
six months from the date cheque
six months from the date of delivery
None of the above
All of the above
The Correct Answer is :
None of the above
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
23. The effect of crossing a cheque is :
Marks:
Marks:
Marks:
2+ 0.5-
2+ 0.5-
The payee can obtain payment only through a bank.
The payee is compelled to open an account.
The payee will have to endorse the cheque to a bank.
None of the above
All of the above
The Correct Answer is :
The payee can obtain payment only through a bank.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
24. When a Bill is re-endorsed to a previous endorser :
Marks: 2+ 0.5-
2+ 0.5-
he becomes a holder
he may sue upon it
he may negotiate it further
All of these
None of these
The Correct Answer is :
All of these
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
25. A cheque is drawn payable to John or order. It is stolen by Tom. He fores Johns endorsement and receives
payment from the bank. Who I liable to pay the amount to John ?
Marks: 2+ 0.5No body
Tom
Drawee bank
Drawer
None of these
The Correct Answer is :
Tom
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
26. A person acquiring an instrument under a forged endorsement, even through he received it for value and in
good faith can never be a :
Marks: 2+ 0.5holder in due course
endorser
transferer
None of these
All of these
The Correct Answer is :
holder in due course
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
27. X draws a Bill on Y.Y accepts the bill without any consideration. The bill is transferred to Z without
consideration. Z transfers it to A for value, A can sue :
Marks: 2+ 0.5X, Y or Z
X only
Y only
Z only
None of these
The Correct Answer is :
X, Y or Z
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
28. In the case default in presentment, all parties are absolved from the liability except :
drawee of a cheque
acceptor of bill of exchange
maker of promissory note
All of the above
None of the above
The Correct Answer is :
All of the above
You did not answer the question.
Marks:
2+ 0.5-
Explanation :
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Module : Module B
Chapter : Chapter3
29. Under Negotiable Instruments Act, whereby such words are added to a endorsement whereby the endorser
waives his right to receive notice to dishonour, it is known as :
Marks: 2+ 0.5Blank endorsement
Endorsement in full
Restrictive endorsement
None of these
(a) and (b) above
The Correct Answer is :
facultative endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
30. Ram of Kolkata draws a Bill of exchange on Prakash of Banglore payable at Tokyo. It is :
Marks:
Inland Bill
Foreign Bill
Accommodation Bill
All of the above
None of the above
The Correct Answer is :
Foreign Bill
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
31. Under Negotiable Instruments Act, if in Bill no time for payment is mentioned, it will be taken as :
Marks: 1+ 0.25A Demand Bill
Usance Bill
Term Bill
As liked by the drawer
None of these
The Correct Answer is :
A Demand Bill
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
32. Bill of Exchange, Promissory Notes and Cheques are defined as :
Negotiable Instruments
Trust Receipts
Documents of Title to Goods
None of these
Stamped Instruments
The Correct Answer is :
Negotiable Instruments
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
33. A cheque is payable to :
Marks: 2+ 0.5demand
24 hours after presentation
Marks:
2+ 0.5-
2+ 0.5-
a fixed future date
happening of certain event
None of these
The Correct Answer is :
demand
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
34. Two parallel transverse lines across the cheque is called :
Crossing
Endorsement
Assignment
Transfer
None of these
The Correct Answer is :
Crossing
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
35. The crossing in a crossed cheque can be cancelled by :
Drawer
Endorser
Payee
drawee
None of these
The Correct Answer is :
Drawer
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
36. 'Sans recourse' means :
Marks:
Marks:
Marks:
2+ 0.5-
2+ 0.5-
2+ 0.5-
Do not talk to me
Without liability to me
Ask the drawer
All of these
None of the above
The Correct Answer is :
Without liability to me
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
37. Mere signature on the reverse of the instrument is called :
sale instrument
null and void instrument
blank endorsement
conditional endorsement
None of the above
The Correct Answer is :
blank endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
Marks:
2+ 0.5-
38. How many types of bills are there ?
Marks:
2+ 0.5-
Demand Bills
Usance Bills
Both of the above
None of the above
Accommodation Bill
The Correct Answer is :
Both of the above
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
39. Demand Bill means :
Marks: 1+ 0.25A Bill, which is expressed to be payable on demand, at sight on presentation.
No time for payment is specified
None of these
Both of these
Time for payment is specified.
The Correct Answer is :
Both of these
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
40. A Bill which is payable after a specified time or on a future date, is called :
Marks:
2+ 0.5-
Future Bill
Usance Bill
Clean Bill
Documentary Bill
None of these
The Correct Answer is :
Usance Bill
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
41. When the day on which a bill of exchange or promissory note is payable happens to be a public holiday, the
instrument shall be deemed to be due on :
Marks: 2+ 0.5the next preceding business day
the following day
the same day by special arrangement
None of these
All of the above
The Correct Answer is :
the next preceding business day
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
42. Days of grace, in case of bills of exchange and promissory notes, are allowed, if these are payable :
Marks: 2+ 0.5on demand
on demand
at a certain period after date or after sight
All of these
None of the above
The Correct Answer is :
at a certain period after date or after sight
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
43. Days of grace are not allowed in the case of :
Marks:
2+ 0.5-
cheques
bill of exchange and promissory note where no time for payment is specified
Both (a) and (b)
None of the above
Any of (a) and (b)
The Correct Answer is :
Both (a) and (b)
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
44. In the case of an instrument payable in instalments, days of grace are allowed for :
each instalment
any one of the instalement
first instalment
last instalment
None of these
The Correct Answer is :
each instalment
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
45. Days of grace are allowed in India, because
Marks:
2+ 0.5-
it is provided under the Negotiable Instruments Act, 1881
it is a banking practice
it is a custom of traders
None of the above
(a) and (b)
The Correct Answer is :
it is provided under the Negotiable Instruments Act, 1881
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
46. 'Escrow' is a term used to denote :
Marks: 2+ 0.5negotiability of the instruement
an instrument incomplete in respect of date
an instrument without consideration
conditional delivery of the instrument
None of the above
The Correct Answer is :
conditional delivery of the instrument
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
47. 'Kite flying' means
Marks: 2+ 0.5a clean bill
a bill drawn/accepted without any genuine trade transaction
a clean demand bill
Marks:
2+ 0.5-
a clean demand usance bill
None of the above
The Correct Answer is :
a bill drawn/accepted without any genuine trade transaction
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
48. A Bill of exchange drawn on a partnership firm must be accepted by
Marks: 2+ 0.5all the partners jointly
any two partners
any partner
the managing partner
None of the above
The Correct Answer is :
any partner
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
49. A Bill drawn addressed to two or more drawees should be accepted by :
any one of the drawees
any two of the drawees
all the drawees
None of these
Any of the above
The Correct Answer is :
all the drawees
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
50. Non-presentment of a Bill to the drawee within a reasonable time :
does not discharged the drawee of the liability
discharged the drawee from his liability
has no effect on the drawees liability
None of the above
(a) and (b)
The Correct Answer is :
discharged the drawee from his liability
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
51. Presentment for payment to a banker is required to be made :
Marks:
Marks:
Marks:
2+ 0.5-
2+ 0.5-
2+ 0.5-
during public holidays
at the residence o the manager
during working hours only
after office hours
None of the above
The Correct Answer is :
during working hours only
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
52. Where specific agreement to usage authorizes presentment by post, it should be done by :
0.5-
Marks:
2+
Ordinary post
Registered post
Recorded delivery
V.P.P
Courier service
The Correct Answer is :
Registered post
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
53. In the event of the death of the maker or the acceptor :
Marks:
2+ 0.5-
the bill is treated as discharged
the bill is treated as dishonoured
the bill is treated as null and void
the bill may be presented to his legal representative
None of the above
The Correct Answer is :
the bill may be presented to his legal representative
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
54. Under Section 131 of the N.I. Act the collecting banker is not protected for the collection of :
0.5crossed cheques
uncrossed cheques
order cheques
bearer cheques
(a) and (c)
The Correct Answer is :
uncrossed cheques
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
55. Section 131 of the N.I. Act provided statutory protection to a collecting Banker if
the cheque is crossed
the cheque is collected for a customer
the cheque is collected in good faith and without negligence
All of the above
None of the above
The Correct Answer is :
All of the above
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
56. Which of the following does not constitute Payment in due course ?
Payment of a post dated cheque.
Payment of a crossed cheque across the counter.
Payment of a cheque the payment of which has been countermanded.
All of the above
None of the above
The Correct Answer is :
All of the above
You did not answer the question.
Marks:
Marks:
2+ 0.5-
Marks:
2+ 0.5-
2+
Explanation :
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Module : Module B
Chapter : Chapter3
57. A paying banker is provided protection under Section 85(1) of the N.I. Act in respect of :
0.25forged endorsement
forgery of the drawers signature
Both of the above
None of the above
Any of the above
The Correct Answer is :
forged endorsement
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
58. A cheque crossed as 'payees a/c only' is a direction to :
Marks:
Marks:
1+
2+ 0.5-
the payee not to negotiate the cheque
the paying banke to ensure that the proceeds of the cheques are credited to the payees a/c only
the collecting banker to ensure that the proceeds of the cheque are collected for the account of the payee
only
None of the above
All of the above
The Correct Answer is :
the collecting banker to ensure that the proceeds of the cheque are collected for the
account of the payee only
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
59. 'Conversion' means :
Marks: 2+ 0.5an unjustifiable denial of a persons title in relation to his goods
collection of a cheque for a customer drawn on another bank
converting a crossed cheque into uncrossed one
the act of crossing a cheque
All of the above
The Correct Answer is :
an unjustifiable denial of a persons title in relation to his goods
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
60. Which of the following is material alteration ?
Marks: 2+ 0.5Crossing of a cheque.
Conversion of blank endorsement into an endorsement in full.
Filling blanks in an inchoate instruement
Alteration of the rate of interest.
All of the above
The Correct Answer is :
Alteration of the rate of interest.
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
61. A cheque can be endorsed on :
Marks: 2+ 0.5a stamped paper intended to be completed as a negotiable instrument
face or back of the instrument
a piece of paper annexed to the instrument
Any one of the above
None of the above
The Correct Answer is :
Any one of the above
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
62. A Bill dated 01.01.2004 is payable thirty one days after date. It falls due on :
Marks:
2+ 0.5-
February 04th, 2004
February 01st, 2004
January 01st, 2004
Feb. 03rd, 2004
None of the above
The Correct Answer is :
February 04th, 2004
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
63. A Bill dated 05th Nov. 2003 is payable three months after sight. Bill is sighted on 60th November 2003. The
bill will fall due on :
Marks: 2+ 0.509th February, 2004
08th February, 2004
05th February, 2004
06th February, 2004
None of the above
The Correct Answer is :
09th February, 2004
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3
64. A Bill is payable ten days after marriage of D. D;s marriage takes place on 15th July, 2003. It will fall due
on :
Marks: 2+ 0.5a) 25th July, 2003
b) 28th July, 2003
c) 27th July, 2003
d) None of the above
e) 24th July 2003
The Correct Answer is :
b) 28th July, 2003
You did not answer the question.
Explanation :
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Module : Module B
Chapter : Chapter3