Negotiable Instruments Quiz

Which of the following describes an instrument which is payable at a definite time or after a specific amount of time?

• Time instrument

• Demand instrument

• Non-negotiable instrument

• Unconditional instrument

Which of the following is a bill of exchange drawn on a drawer’s specified financial institution to be payable to the payee?

• Promissory note

• Check

• Draft

• Certificate of deposit

What bill of exchange is payable upon being presented to the payee or upon acceptance?

• Sight draft

• Time draft

• Promissory draft

• Exchange draft

Which of the following methods of writing is NOT recommended when drawing a negotiable instrument?

• Non-erasable ink

• Pencil

• Stamp

• Black ball pen

Which of the following is NOT a requirement of a negotiable instrument?

• It must be in writing

• It must be signed by the maker or drawer

• It must be for a fixed amount in money

• It must contain a conditional promise

Which of the following, if included, permits the date of maturity to be extended?

• Extension clause

• Acceleration clause

• Negotiation clause

• Discharge clause

Which of the following is NOT a mode of discharge?

• By payment in due course

• By express waiver

• By cancellation

• By holder alteration

Roberto voided a check he had written. This is an example of which mode of discharge?

• By payment in due course

• By express waiver

• By cancellation

• By holder alteration

Which of the following is an example of a personal defense?

• Forgery

• Breach of contract

• Bankruptcy

• Fraudulent alteration

Which of the following is a primary party in a contract liability?

• The drawer of a check

• The maker of a promissory note

• The endorser

• The holder in due course