Quiz: Negotiable Instruments Act



01. Negotiable Instruments Act extends to?
a. Whole of India
b. Whole of India except in J & K
c. Only in States/UTs
d) None


02. Identify the Promissory Note from the following:
a. I promise to pay B or Order Rs.500
b. I acknowledge myself to be indebted to B in Rs.1000/- to be paid on demand for value received
c. I promise to pay B Rs.500/-, and all other sum which shall be due to him
d. a & b

03. Which among the following are the requirements of a Promissory Note?
a. It must contain an unconditional promise to pay a certain sum of money
b. It must contain a conditional order to pay a certain sum of money
c. It must be payable to the order of specified person or bearer
d. a & c

04. “I Mrs. A, daughter of Mr. X, executed and promise that a sum of Rs. 15,000/- has been obtained by me from Mr. B in cash and I agree to pay thereof that in future on demand the principal will paid in one lump sum and this pronote will be taken by me”
a. The above statement is a promissory note
b. The above statement can never be considered as promissory note
c. The statement can become a Promissory Note only after alterations
d. None of the above.

05. An Usance Promissory Note has to be presented for acceptance by the maker.
a. It is true
b. It is false
c. Promissory Note is always on demand
d. none

06. Demand Promissory Note attracts stamp duty only on the amount where as Usance Promissory Note attracts stamp duty based on the amount and the period [tenor].
a. True
b. False
c. Partially true
d. All of these.

07. Stamp duty on Promissory Note is:
a. Same throughout India
b. Varies from state to state
c. both are correct
d. none

08. Promissory Note payable to bearer:
a. Can be drawn by anybody
b. Cannot be drawn by everybody
c. It all depends on advocates
d. None of these.

09. Bill of Exchange is defined in Section …….of Negotiable Instruments Act
a. 4
b. 5
c. 6
d. None

10. Bank Notes and Currency Notes are
a. Promissory Notes
b. Not Promissory Notes
c. Semi Promissory Notes
d. None

11. Bills of Exchange should always contain:
a. A conditional order to pay a certain sum of money
b. Both a & b
c. Unconditional order to pay a certain sum of money
d. None of these

12. A Bills of Exchange in vernacular language is called as
a. Hundi
b. It cannot be drawn like this
c. Akshyapatra
d. none

13. Acceptance is necessary in case of:
a. Demand Bill
b. Usance Bill
c. Both a or b
d. None of these

14. At sight Bills of Exchange are also called as
a. Demand Bills
b. Usance Bill
c. Both a and b
d. None of these

15. The word ‘after sight’ in Bills of Exchange means
a. After acceptance
b. After payment
c. Either a or b
d. None


16. The liability of Drawee in an Usance Bill of Exchange starts
a. When bill is drawn b. when the bill is accepted by him
c. Liability is always of drawer d. None

17. An Usance bill must be presented to the Drawee:
a. At his place of business during his business hours for his acceptance
b. At his place of business even after his business hours for his acceptance
c. At any place even after his business hours of the bank
d. At the bank’s premises during business hours of the bank

18. The bill must be presented to the Drawee for acceptance / payment within:
a. 24 hours of receipt of the bill b. 48 hours of receipt of the bill
c. Any time after receipt of the bill d. None of these

19. What is the time allowed to the Drawee for accepting the bill?
a. 24 hours exclusive of public holidays
b. 48 hours exclusive of public holidays
c. either a or b
d. none of these

20. When rate of interest is not specified in Instrument, interest on the amount due is payable at:
a. 18% p.a.
b. 6% p.a.
c. At the discretion of Drawee
d. None of these

Answers

Q         1         2         3         4         5         6         7         8        9         10
Ans    a          a         d         a          b         a          a          b         b         b
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Q         11       12       13       14       15       16       17       18       19       20

Ans    c          a          b        d         a          a          a          a          b         a