1
Test bank Comprehensive Business Law questions and verified answers 2025
update
1. The difference between negotiation and assignment are that negotiation
refers only to negotiable instruments while assignment refers generally to an
ordinary contract. Negotiation is governed by Negotiable Instruments Law
while assignment is governed by the laws on assignment of credits of the new
Civil Code a. Both statements are false
b. First statement is true, Second is false
c. First statement is false, Second is false
d. Bothe statements are true
Correct Answer ✅ :. D
2.Three of the following are requirements of a valid indorsement. Which one is
not?
a. The indorsement must be written on the instrument itself or upon a paper
attached thereto
b. It must be completed by delivery
c. The indorsement should not contain any conditions or restrictions
d. It must be an indorsement of the entire instrument
Correct Answer ✅ :. C
3. Three of the following are the legal effects of the delivery of an order
instrument without indorsement. Which one is not?
a. The transfer operates as an ordinary assignment and the transferee
acquires the instrument subject to all defenses, real or personal
, 2
b. The transferee acquires all the rights of a holder
c. The transferee can demand from the transferor that the instrument be
properly indorsed to him
d. The transferee is not a holder as defined under the Negotiable
Instruments Law
Correct Answer ✅ :. B
4. In case of undelivered and incomplete instruments, a maker is still liable
thereon. The indorsement of a minor does not make him liable on the
instrument, although such indorsement passes title over the instrument
a. First statement is true, Second is false
b. First statement is false, Second is true
c. Both statements are true
d. Both statements are false
Correct Answer ✅ :. B
5. In three of the following, a person whose signature does not appear in the
instrument, Is nonetheless liable. Which is not?
a. Where a person signs in a trade or assumed name
b. The forger, in cases of forgery of instruments
c. A person who negotiates by delivery is liable to his immediate transferee
d. A person whose signature was forged
Correct Answer ✅ :. D
6. A holder has no right to sue on the instrument in his own name. However,
he may receive payment, and if the payment is in due course, the
,3
b. Both statements are false
c. First statement is true, Second is false
d. First statement is false, Second is true
Correct Answer ✅ :. D
7.Three of the following are personal defenses. Which one is not?
a. Want of delivery of an incomplete instrument
b. Want of delivery of a complete instrument
c. Acquisition of an instrument by unlawful means
d. Filling up of wrong date
Correct Answer ✅ :. A
8. When a signature in an instrument does not indicate in what capacity a
person had intended to sigh, the person whose signature appears on the
instrument is deemed to be:
a. Drawer
b. Drawee
c. Indorser
d. Indorsee
Correct Answer ✅ :. C
9. A issued a negotiable note to B. B indorsed it to C, a minor. C indorsed to D
and D to E. Who will be liable to E, if A will dishonor the note
a. Only D being the immediate transferor
b. B, C, and D being secondary parties
c. Only B and D, C is not liable being a minor
, 4
Correct Answer ✅ :. C
10. One of the following is not a requisite for the negotiability of a promissory
note:
a. The promissory note must be in writing and signed by the maker
b. The promissory note must be payable on demand or at a fixed or
determinable future time
c. The promissory note must be payable to a specified person named therein
d. The payee of a promissory note payable to order must be named or
otherwise indicated therein with reasonable certainty
Correct Answer ✅ :. C
11. Which of the following instruments is non-negotiable?
a. A bill of exchange written with the use of a pencil
b. A bill of exchange written on a wall
c. A promissory note written on a piece of cloth
d. A promissory note signed with a mark
Correct Answer ✅ :. B
12. One of the following is not a negotiable instrument:
a. Treasury warrant
b. Bond
c. Certificate of deposit
d. Banker’s acceptance
Correct Answer ✅ :. A
13. Which of the following instruments is not payable with a sum certain in
Test bank Comprehensive Business Law questions and verified answers 2025
update
1. The difference between negotiation and assignment are that negotiation
refers only to negotiable instruments while assignment refers generally to an
ordinary contract. Negotiation is governed by Negotiable Instruments Law
while assignment is governed by the laws on assignment of credits of the new
Civil Code a. Both statements are false
b. First statement is true, Second is false
c. First statement is false, Second is false
d. Bothe statements are true
Correct Answer ✅ :. D
2.Three of the following are requirements of a valid indorsement. Which one is
not?
a. The indorsement must be written on the instrument itself or upon a paper
attached thereto
b. It must be completed by delivery
c. The indorsement should not contain any conditions or restrictions
d. It must be an indorsement of the entire instrument
Correct Answer ✅ :. C
3. Three of the following are the legal effects of the delivery of an order
instrument without indorsement. Which one is not?
a. The transfer operates as an ordinary assignment and the transferee
acquires the instrument subject to all defenses, real or personal
, 2
b. The transferee acquires all the rights of a holder
c. The transferee can demand from the transferor that the instrument be
properly indorsed to him
d. The transferee is not a holder as defined under the Negotiable
Instruments Law
Correct Answer ✅ :. B
4. In case of undelivered and incomplete instruments, a maker is still liable
thereon. The indorsement of a minor does not make him liable on the
instrument, although such indorsement passes title over the instrument
a. First statement is true, Second is false
b. First statement is false, Second is true
c. Both statements are true
d. Both statements are false
Correct Answer ✅ :. B
5. In three of the following, a person whose signature does not appear in the
instrument, Is nonetheless liable. Which is not?
a. Where a person signs in a trade or assumed name
b. The forger, in cases of forgery of instruments
c. A person who negotiates by delivery is liable to his immediate transferee
d. A person whose signature was forged
Correct Answer ✅ :. D
6. A holder has no right to sue on the instrument in his own name. However,
he may receive payment, and if the payment is in due course, the
,3
b. Both statements are false
c. First statement is true, Second is false
d. First statement is false, Second is true
Correct Answer ✅ :. D
7.Three of the following are personal defenses. Which one is not?
a. Want of delivery of an incomplete instrument
b. Want of delivery of a complete instrument
c. Acquisition of an instrument by unlawful means
d. Filling up of wrong date
Correct Answer ✅ :. A
8. When a signature in an instrument does not indicate in what capacity a
person had intended to sigh, the person whose signature appears on the
instrument is deemed to be:
a. Drawer
b. Drawee
c. Indorser
d. Indorsee
Correct Answer ✅ :. C
9. A issued a negotiable note to B. B indorsed it to C, a minor. C indorsed to D
and D to E. Who will be liable to E, if A will dishonor the note
a. Only D being the immediate transferor
b. B, C, and D being secondary parties
c. Only B and D, C is not liable being a minor
, 4
Correct Answer ✅ :. C
10. One of the following is not a requisite for the negotiability of a promissory
note:
a. The promissory note must be in writing and signed by the maker
b. The promissory note must be payable on demand or at a fixed or
determinable future time
c. The promissory note must be payable to a specified person named therein
d. The payee of a promissory note payable to order must be named or
otherwise indicated therein with reasonable certainty
Correct Answer ✅ :. C
11. Which of the following instruments is non-negotiable?
a. A bill of exchange written with the use of a pencil
b. A bill of exchange written on a wall
c. A promissory note written on a piece of cloth
d. A promissory note signed with a mark
Correct Answer ✅ :. B
12. One of the following is not a negotiable instrument:
a. Treasury warrant
b. Bond
c. Certificate of deposit
d. Banker’s acceptance
Correct Answer ✅ :. A
13. Which of the following instruments is not payable with a sum certain in
