Multiple Choice Questions
1. ‘Mr. Ram, I owe you a sum of Rs 1000/’- is
a) Promissory Note b) Acknowledgement of debt c) Conditional Promise d) None of these
2. “We have received a sum of Rs 15000/- from Sri Vikash Prasad Verma. The above amount will be repaid on demand. We have received Rs 15000/- in cash today is
a) Promissory Note b) Acknowledgement of debt c) Neither a nor b d) Both a & b
3. A cheque becomes stale after expiry of how many months from the date of the cheque?
a) 3 months b) 6 months c) 9 months d) 12 months
4. A negotiable instrument can be negotiated
a) By mere delivery if payable to bearer b) By endorsement and delivery if payable to order c) Both a and b are true d) Neither A Nor B is true
5. A Quasi Negotiable Instrument is
a) an instrument printed in the form of an NI b) has some characteristics of an NI c) none of them d) may be any of them
6. A truncated cheque is
a) a cheque cut into 2 pieces b) a cheque in a trunk c) scan of the physical cheque d) none of them
7. Bill of Exchange is defined in Sec ______ of NI Act
a) Sec 4
b) Sec 5
c) Sec 6
d) Sec 8
8. A promissory note is defined in Sec ______ of NI Act
a) Sec 4
b) Sec 5
c) Sec 6
d) Sec 8
9. Crossing of the cheque can be cancelled by
a) Drawer only along with his initial
b) Drawer only along with his full signature
c) Payee of the cheque
d) Holder in due course
10. The person who is directed to pay in a Bill of exchange or Cheque is known as __
a) Drawer
b) Drawee
c) Holder
d) Payee
Fill in the blanks
1. General crossing of a cheque requires parallel transverse lines simply, either with or without the words Account Payee
2. In a BE, the number of parties are 2
3. In India, the reasonable time for presentation to the bank in the case of cheques and drafts is 3 months from date of issue
4. Inchoate negotiable instruments means Incomplete instrument
5. Maker of a Bill of exchange or cheque is known as Drawer
6. Negotiable Instrument Act came into existence in 1881
7. Promissory note is defined in Sec 4 of NI Act
8. Full form of CTS is Cheque Truncation System
9. Negotiable instruments can be payable to Order, Bearer, Joint payees
10. Cheque which is not crossed is a Open cheque.
Question & Answers
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