Practice Test

Q1) The Negotiable Instrument Act, came into force on the _____ Show Answer

Q2) The Negotiable Instrument Act, 1881 extends to the _____ Show Answer

Q3) The Negotiable Instruments Act, 1881 define and amend the law relating to_____
(I) Promissory notes
(II) Bills of exchange
(III) Cheques
(IV) Hundi
Select the correct answer from the options given below. Show Answer

Q4) A negotiable Instrument means a promissory note, bill of exchange or Cheque payable either - Show Answer

Q5) Which of the following can be considered as characteristics of Negotiable Instruments? Show Answer

Q6) Which of the following can be considered as characteristics of Negotiable Instruments?
(A) The holder in due course is entitled to sue on the instrument in his own name
(B) The instrument is transferable till maturity and in case of cheques till it becomes stale.
Select the correct answer from the options given below : Show Answer

Q7) Which of the following can NOT be considered as characteristics of negotiable instruments? Show Answer

Q8) Which of the following can NOT be considered as characteristics of Negotiable Instruments? Show Answer

Q9) A negotiable instrument is freely transferable Show Answer

Q10) A promissory note, bill of exchange or cheque is payable to bearer when______ Show Answer

Q11) A promissory note, bill of exchange or cheque is payable to order _______, and does not contain any words prohibiting transfer or indicating an intention that it shall not be transferable Show Answer

Q12) A promissory note, bill of exchange or cheque drawn or made in India, and made payable or drawn upon any person, resident in India shall be deemed to be______ Show Answer

Q13) A promissory note, bill of exchange or cheque drawn or made in _____ , and made payable or drawn upon any person, resident in India shall deemed to be an inland instrument Show Answer

Q14) A promissory note, bill of exchange or cheque drawn or made in India , and made payable or drawn upon any person ______ shall be deemed to be an inland instrument Show Answer

Q15) An inland instrument is one which is -
1. Drawn and made payable in India.
2. Drawn in India upon some persons resident therein, even though it is made payable in a foreign country.
Select the correct answer from the options given below : Show Answer

Q16) The essential of a foreign instrument include that _____ Show Answer

Q17) A promissory note or a bill of exchange payable after a fixed period, or after sight, or on specificed day, or on the happening of an event which is certain to happen, is known as a _______ Show Answer

Q18) The expression "after sight" in a promissory note means that - Show Answer

Q19) In the case of bill of exchange, the expression "after sight" means - Show Answer

Q20) An instrument, which in form is such that it may either be treated by the holder as as bill or as a note, is - Show Answer

Q21) Bill drawn to or to the order of the drawer or by an agent on his principal, or by one branch of a bank on another or by the direction of a company or their cashier are also ambiguous instrument Show Answer

Q22) When one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instrument, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein, and not exceeding the amount, covered by the stamp. Such an instrument is called___________ Show Answer

Q23) A signs, as maker, a blank stamped paper and gives it to B and authorizes him to fill it as note for Rs.5,000 to secure an advance which 'C' is to make to 'B' .'B' fraudulently fills it up as a note for Rs.20,000 payable to 'C', who has good faith advanced Rs.20,000. Decide, whether 'C' is entitled to recover the amount, and if so, up to what extent? Show Answer

Q24) _______is an instrument in writing containing an unconditional undertaking, signed by the maker to pay certain sum of money to, or to the order of, a certain person, or only to bearer of the instrument Show Answer

Q25) A promissory note is an instrument _______ containing an unconditional undertaking, signed by the maker to pay certain sum of money to, or to the order of, a certain person, or only to bearer of the instrument. Show Answer

Q26) A promissory note is an instrument in writing containing __________, signed by the maker to pay certain sum of money to, or to the order of, a certain person, or only to bearer of the instrument Show Answer

Q27) A promissory note is an instrument in writing containing an unconditional undertaking, signed by the _____ to pay certain sum of money to, or to the order of, a certain person, or only to bearer of the instrument. Show Answer

Q28) A promissory note is an instrument in writing containing an unconditional undertaking, signed by the maker to pay _____ to, or to the order of, a certain person, or only to bearer of the instrument Show Answer

Q29) A promissory note is an instrument in writing containing an unconditional undertaking, signed by the maker to pay a certain sum of money ___________ . Show Answer

Q30) The person who makes or executes the note promising to pay the amount stated therein is called as_____ Show Answer

Q31) The person to whom the amount is payable is called as ______ Show Answer

Q32) Which of the following is / are essential(s) of promissory note? Show Answer

Q33) Which of the following is / are essential(s) of promissory note? Show Answer

Q34) Which of the following is / are essential(s) of promissory note? Show Answer

Q35) Promissory note must contain____ Show Answer

Q36) Promissory note should be signed by _____ Show Answer

Q37) _______ is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the order of, a certain person or to the bearer of the instrument. Show Answer

Q38) The person who draws the bill is known as- Show Answer

Q39) The person on whom the bill is drawn known as _______ Show Answer

Q40) When the holder endorses the bill to anyone else he becomes the - Show Answer

Q41) _______ is the person to whom the bill is endorsed Show Answer

Q42) _______ is the person to whom the sum stated in the bill is payable Show Answer

Q43) The bill is drawn as an order to drawee to pay certain amount to payee. If drawee refuses to honour the bill, another person may be named in the bill itself, as ________ Show Answer

Q44) Essential of a bill of exchange: ________. Show Answer

Q45) Essentials of a bill of exchange: ________. Show Answer

Q46) A bill of exchange must contain________order to pay money only. Show Answer

Q47) A bill of exchange must contain an unconditional_______to pay money only Show Answer

Q48) A bill of exchange must contain an unconditional order to pay______ only. Show Answer

Q49) Kavita draws a bill on Shyam for Rs.30,000. Kavita endorsed it to Ram. Ram endorsed it to Rahim. The payee of the bill will be_________ Show Answer

Q50) A promissory note is a three-party instument. Show Answer

Q51) In a bill of exchange there are three parties- drawer, drawee and payee. Show Answer

Q52) A Promissory note can be made payable to the maker himself Show Answer

Q53) In a bill of exchange the drawer and payee may be the same person. Show Answer

Q54) The liability of the maker of a pro-note is - Show Answer

Q55) Foreign bill of exchange must be protested for dishonour Show Answer

Q56) Normally foreign bills are drawn in sets of _______ Show Answer

Q57) A bill drawn and accepted for a genuine trade transaction is termed as a ________ Show Answer

Q58) _________ is a bill in which a person lends or gives his name to oblige a friend or some person whom he knows or otherwise Show Answer

Q59) A bill which is drawn, accepted or endorsed ______ is called an accommodation bill. Show Answer

Q60) It is only the ______ who can ask for a duplicate bill, promissory note or cheque Show Answer

Q61) A bill of exchange is called as a ______ when a bill of exchange drawn by one bank on another bank,or by itself on its own branch Show Answer

Q62) Statement I :
A bank draft can be drawn only by a bank on another bank or on its own branch.
Statement II :
A bank draft can be made payable to bearer.
Select correct answer from the options given below - Show Answer

Q63) A bank draft cannot be made payable to bearer Show Answer

Q64) A _______ is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand Show Answer

Q65) ________ means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics signature) and asymmetric crypto system Show Answer

Q66) ________ means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing Show Answer

Q67) A cheque is a ______ drawn on a bank payable always______ Show Answer

Q68) A cheque is a bill of exchange - Show Answer

Q69) A cheque does not require acceptance Show Answer

Q70) Essential of a cheque_______ Show Answer

Q71) Stamp is required to be affixed on cheque Show Answer

Q72) In which of the following case banker MAY refuse to honour the cheque ? Show Answer

Q73) A payment will be a payment in due course if - Show Answer

Q74) A cheque is overdue or becomes statute-barred after _________ from its due date of issue Show Answer

Q75) In India, a cheque, which has been in circulation for more than ________, is regarded by bankers as stale Show Answer

Q76) ________ can be presented by the payee to the paying banker and is paid over the counter Show Answer

Q77) Which of the following type of cheque cannot be paid across the counter but must be collected through a banker ? Show Answer

Q78) ______ is a direction to the paying banker to pay the money generally to a banker or to a particular banker, and not to pay otherwise Show Answer

Q79) Crossing is a direction to the paying banker that the cheque should be paid only to - Show Answer

Q80) To restrain negotiability, addition of words _____ is necessary.
(i) Not negotiable
(ii) Account payee only
Select the correct answer from the options given below - Show Answer

Q81) Which of following can be crossed? Show Answer

Q82) In general crossing a cheque bears across its face an addition of - Show Answer

Q83) "Account Payee" crossing warns the collecting banker that the proceeds are to be credited only to the - Show Answer

Q84) The date on which payment of an instrument falls due is called its - Show Answer

Q85) Every instrument payable at _______ is entitled to three days of grace Show Answer

Q86) Days of Grace are allowed for cheques Show Answer

Q87) A negotiable instrument dated 31st January, 2011, is made payable at one months after date. The instrument is at maturity on ______ Show Answer

Q88) A negotiable instrument dated the 31st August, 2011, is made payable 3 months after date. The instrument is at maturity on ______ Show Answer

Q89) If the day of maturity falls on a public holiday, the instrument is payable on the - Show Answer

Q90) If a bill is at maturity on a Sunday. It will be deemed due on - Show Answer

Q91) If due date of bill falls on sudden public holiday, the due date will be__________ Show Answer

Q92) If due date of bill falls on__________ the due date will be preceding business day Show Answer

Q93) If due date of bill falls on__________ the due date will be next business day Show Answer

Q94) On 1.1.2011, X draws a bill on Y for Rs.20,000 for 3 months maturity date of the bill will be________ Show Answer

Q95) On 15.8.2011, X draws a bill on Y for 3 months for Rs.20,000. 18th Nov was a sudden holiday, maturity date of the bill will be________ Show Answer

Q96) On 16.6.2011, X draws a bill on Y for Rs.25,000 for 30 days. 19th July is a public holiday, maturity date of the bill will be________ Show Answer

Q97) X draws a bill on Y for Rs.30,000 on 1.1.2011. X accepts the same on 4.1.2011 for a period of 3 months after date. What will be the maturity date of the bill ________ Show Answer

Q98) X draws a bill on Y. X endorsed the bill to Z. The payee of the bill will be - Show Answer

Q99) X draws a bill on Y for Rs.2,50,000 on 1.1.2011 for 3 months after sight, date of acceptance is 6.1.2011. Maturity date of the bill will be - Show Answer

Q100) On 1.8.2011, X draws a bill on Y "for 30 days after sight". The date of acceptance is 8.8.2011. The maturity date of the bill will be - Show Answer

Q101) On 18.2.2011, A draws a bill on B for Rs.1,25,000. B accepted the bill on 21.2.2011. The bill is drawn for 30 days after sight. The maturity date of the bill will be - Show Answer

Q102) Which of the following person do not incur any liability as parties to negotiable instruments? Show Answer

Q103) A negotiable instrument may be transferred by -
1. Negotiation
2. Assignment
3. Delivery
Select the correct answer from the options given below - Show Answer

Q104) ______ is the transfer of an instrument a note, bill or cheque for one person to another in such a manner as to convey title and to constitute the transferee the holder thereof. Show Answer

Q105) In case of assignment, there is a transfer of ownership by means of a _________ document Show Answer

Q106) ______means and involves the writing of something on the back of an instrument for the purpose of transferring the right, title and interest therein to some other person Show Answer

Q107) The person to whom the instrument is endorsed is called the ________ Show Answer

Q108) An endorsement is to be _____ where the endorser merely writes his signature on the back of the instrument, and the instrument so endorsed becomes payable to bearer, even though originally it was payable to order Show Answer

Q109) If the endorser signs his name and adds a direction to pay the amount mentioned in the instrument to, or to the order of a specified person, the endorsement is said to be _______. Show Answer

Q110) An endorsement is restrictive which prohibits or resticts the future negotiation of an instrument. Show Answer

Q111) An endorsement is conditional or qualified which limits or negative the liability of the endorser Show Answer

Q112) An endorser may limit his liabiliy in any of the following ways______ Show Answer

Q113) When a person who has been a party to the negotiable instrument takes it again then an instrument is said to have been_________ Show Answer

Q114) Forgery conveys no title Show Answer

Q115) If an instrument be negotiated by means of a forged endorsement, the endorsee acquires no title even though he be a purchaser for value and in good faith, for the endorsement is a nullity Show Answer

Q116) Noting is necessary in case of _______ of bill Show Answer

Q117) The _________ is the formal notarial certificate attesting the dishonour of the bill, and based upon the noting which has been effected on the dishonour of the foreign bill Show Answer

Q118) A material alteration renders the instrument_______ Show Answer

Q119) Alteration of date, sum payable, time of payment, place of payment, name of parties or rate of interest will be treated as material alteration Show Answer

Q120) Which of the following act will not be treated as material alteration in relation to negotiable instrument? Show Answer

Q121) Which of the following act will not be treated as material alteration in relation to negotiable instrument? Show Answer

Q122) _______ are negotiable instruments written in an oriental language Show Answer

Q123) Which of the following is not covered under the negotiable Instruments Act, 1881? Show Answer

Q124) Hundis are governed by the _____ in the locality Show Answer

Q125) The hundis were in circulation in India even before the present Negotiable Instruments Act, 1881 came into operation. Show Answer

Q126) Offence of dishonor shall be punishable with - Show Answer

Q127) Merely because the drawer issued a notice to the drawee or to the Bank for 'stop paymet' , it would not preclude an action under Section 138 by the drawee or holder in due course. Show Answer

Q128) In which of the following case banker MUST refuse to honour the cheque ?
Show Answer

Q129) In which of the following case banker MUST refuse to honour the cheque ?
Show Answer

Q130) In which of the following case banker MAY refuse to honour the cheque ?
Show Answer

Q131) Which of the following is foreign instrument - Show Answer

Q132) Which of following is/ are essentials of a bill of exchange?
(1) It must contain clear undertaking to pay.
(2) It must be signed by the drawer.
(3) The maker must sign it in taking an under taking to pay to payee or his order.
(4) The parties must be certain.
Select the correct answer from the options given below. Show Answer

Q133) In which of the following case banker MUST refuse to honor the cheque? Show Answer

Q134) In which of the following case banker MAY refuse
to honor the cheque? Show Answer

Q135) In which of the following case banker MAY refuse to honor the cheque?
(i) When the cheque is of doubtful legality.
(ii) When the customer has given notice of assignment of the credit balance of his account
(iii) When the cheque is presented at a branch where the customer has no account.
(iv) When the holder's title is defective and the banker comes to know of it.
Select the correct answer from the options given below. Show Answer