The Negotiable Instruments Act, 1881 One Mark Online Test

The Negotiable Instruments Act, 1881 One Mark Online Test (12th Standard Commerce)

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Negotiable Instrument Act was passed in the year ______.

A.1981 B.1881 C.1994 D.1818

Number of parties in a bill of exchange are

A.2 B.6 C.3 D.4

Section 6 of Negotiable Instruments Act 1881 deals with

A.Promissory Note B.Bills of exchange C.Cheque D.None of the above

_______ cannot be a bearer instrument.

A.Cheque B.Promissory Note C.Bills of exchange D.None of the above

A cheque will become stale after _____ months of its date:

A.3 B.4 C.5 D.1

In the term negotiable instrument, the word 'negotiable' means

A.registered with a court of law B.transferable from one person to another in return for consideration C.payable only to the original payee D.stamped and attested by a banker

Who described a negotiable instrument as one, the property in which is acquired by anyone who takes it bonafide and for value, notwithstanding any defect of title in the person from whom he took it?

A.N.D. Kapoor B.P.C. Tulsian C.Justice K.C. Wills D.Bharat Tulsian

A person who takes a negotiable instrument in good faith and for value is known as

A.an assignee B.a holder in due course C.a drawee D.an endorser

Consider the following presumptions about a negotiable instrument:
1. It is presumed to have been drawn or accepted for consideration.
2. Its transfer is presumed to have been made after maturity.
3. A lost instrument is presumed to have been duly stamped.
4. Its holder is presumed to be a holder in due course.
Which of these are correct?

A.1, 2 and 3 only B.1, 3 and 4 only C.2, 3 and 4 only D.1, 2 and 4 only

Q10

Assertion (A): A holder in due course of a negotiable instrument may get a better title than the transferor had.
Reason (R): In negotiability, the defects in the title of the transferor pass on to the transferee.

A.Both A and R are true and R is the correct explanation of A B.Both A and R are true but R is not the correct explanation of A C.A is true but R is false D.A is false but R is true

Q11

In which of the following must the transferee give notice of the transfer of the debt to the debtor?

A.Negotiation of a cheque by endorsement and delivery B.Transfer of a bearer instrument by mere delivery C.Assignment of a debt (actionable claim) D.Transfer of a bill to a holder in due course

Q12

A bill of exchange cannot be made payable

A.on demand B.after a specified period C.to bearer on demand D.to the order of a certain person

Q13

A customer writes 'Please pay Rs. 5,000 to Kumar' on a cheque form drawn on his bank. Which statement is correct?

A.It is not a cheque because the word 'order' is missing B.It is not a cheque because the word 'please' makes the order conditional C.It remains a cheque because using 'please' before 'pay' does not destroy the order D.It becomes a promissory note

Q14

How many days of grace are allowed while calculating the maturity date of a time bill?

A.One day B.Two days C.Three days D.No days

Q15

Which of the following is NOT true of a cheque?

A.It is payable on demand only B.It does not require acceptance C.It can be crossed D.Three days of grace are allowed for its payment

Q16

Consider the following statements on a bill of exchange and a cheque:
1. Foreign bills of exchange are drawn in sets of three.
2. A cheque can be drawn and made payable in any currency.
3. A bill of exchange cannot be crossed.
4. Notice of dishonour is necessary for a cheque.
Which of these are correct?

A.1 and 2 only B.1 and 3 only C.2 and 4 only D.3 and 4 only

Q17

Whose liability on the instrument is primary?

A.The drawer of a bill of exchange B.The maker of a promissory note C.The payee of a bill of exchange D.The holder of a cheque

Q18

The maker of a promissory note is a

A.creditor B.debtor C.banker D.endorsee

Q19

In which of the following instruments can the drawer and the payee be one and the same person?

A.Promissory note B.Bill of exchange C.Currency note D.Bank note

Q20

Consider the following statements about a promissory note:
1. It must be in writing.
2. It cannot be made payable to bearer.
3. It may be made payable in foreign money.
4. A bank note or a currency note is a promissory note.
Which of these are correct?

A.1 and 2 only B.1 and 3 only C.2 and 4 only D.1, 2 and 3 only

Q21

Match the sections of the Negotiable Instruments Act, 1881 with what they deal with:
(a) Section 4 - 1. Special crossing
(b) Section 5 - 2. Endorsement
(c) Section 15 - 3. Promissory note
(d) Section 124 - 4. Bill of exchange

A.a-3, b-4, c-2, d-1 B.a-4, b-3, c-1, d-2 C.a-3, b-4, c-1, d-2 D.a-4, b-3, c-2, d-1

Q22

Which of the following does NOT constitute a crossing of a cheque?

A.Two parallel transverse lines across its face B.Two parallel transverse lines with the words '& Co.' between them C.A cross mark such as 'X' on its face D.Two parallel transverse lines with the words 'not negotiable'

Q23

General crossing of a cheque is defined in which section of the Negotiable Instruments Act, 1881?

A.Section 6 B.Section 15 C.Section 123 D.Section 124

Q24

The essential part of a special crossing is

A.two parallel transverse lines B.the words 'and company' C.the name of a banker written on the face of the cheque D.the signature of the payee on the back

Q25

The effect of a general crossing on a cheque is that the paying banker

A.pays the amount across the counter to anyone B.pays the amount only through another banker C.refuses to pay until the cheque is stamped D.pays only after three days of grace

Q26

When there is no space on a negotiable instrument for further endorsements, a piece of paper attached to it for the purpose is called

A.a rider B.an allonge C.a counterfoil D.a protest note

Q27

Consider the following statements on the requisites of a valid endorsement:
1. Endorsement of only a part of the amount of the instrument is invalid.
2. Signing in block letters constitutes a regular endorsement.
3. An illiterate payee may endorse by affixing his thumb impression, duly attested.
4. Endorsements are presumed to have been made in the order in which they appear.
Which of these are correct?

A.1, 2 and 3 only B.1, 3 and 4 only C.2, 3 and 4 only D.1, 2 and 4 only

Q28

Match the endorsements with their kinds:
(a) Pay X only - 1. Sans recourse endorsement
(b) Pay X or order without recourse to me - 2. Blank endorsement
(c) Pay X or order, notice of dishonour waived - 3. Restrictive endorsement
(d) The endorser's mere signature - 4. Facultative endorsement

A.a-3, b-1, c-4, d-2 B.a-1, b-3, c-2, d-4 C.a-3, b-4, c-1, d-2 D.a-2, b-1, c-4, d-3

Q29

'Pay Paari, if he returns from Delhi within three months' signed by Pallavan is an example of

A.blank endorsement B.conditional endorsement C.partial endorsement D.facultative endorsement

Q30

The MICR code, found at the bottom of a cheque, stands for

A.Magnetic Ink Character Recognition B.Money Instrument Clearing Register C.Machine Index Code Reader D.Monetary Ink Cheque Record

Q31

Which statement about the IFSC code is correct?

A.It is a 9-digit numeric code printed at the bottom of a cheque B.It is an 11-character code whose fifth character is 0 C.Its first four characters represent the branch D.It is used only for clearing cheques by MICR

Q32

A negotiable instrument matures on a day declared an emergency holiday because of a natural calamity. When should it be paid?

A.On the preceding working day B.On the same day at the bank's discretion C.On the next working day D.After three days of grace from the holiday

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