Chapter 22: The Negotiable Instruments Act 1881 — Online MCQ Test
COMMERCE · CLASS 12th · Tamil Nadu State Board
Practice Chapter 22: The Negotiable Instruments Act 1881 with a free chapter-wise online MCQ test.
This chapter covers: This chapter details negotiable instrument properties negotiability traits and assignability rules. Students compare Bills of Exchange Cheques and Promissory Notes while learning c....
AI-generated questions from basic to board-exam level, with instant results and explanations.
Chapter 22: The Negotiable Instruments Act 1881 — Important Questions & Answers
Which of the following is NOT a negotiable instrument under the Negotiable Instruments Act, 1881?
- A. Promissory Note
- B. Bill of Exchange
- C. Cheque
- D. Receipt
Answer: D. Receipt
A receipt is only an acknowledgement of payment and is not freely transferable as a negotiable instrument. Promissory notes, bills of exchange, and cheques are negotiable instruments.
A receipt is only an acknowledgement of payment and is not freely transferable as a negotiable instrument. Promissory notes, bills of exchange, and cheques are negotiable instruments.
A cheque is a bill of exchange drawn on a specified banker and payable on demand. This statement is:
- A. True
- B. False
- C. Partly true only for promissory notes
- D. True only when crossed
Answer: A. True
The Act defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
The Act defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
A negotiable instrument is said to be transferable by:
- A. Delivery or endorsement and delivery
- B. Only by court order
- C. Only by registration
- D. Only by assignment in writing
Answer: A. Delivery or endorsement and delivery
Negotiable instruments can be transferred either by delivery or by endorsement followed by delivery, depending on the type of instrument.
Negotiable instruments can be transferred either by delivery or by endorsement followed by delivery, depending on the type of instrument.
Which statement is correct regarding assignment and negotiation?
- A. Assignment gives better title than negotiation in all cases
- B. Negotiation generally gives a better title to a holder in due course
- C. Assignment is possible only for bearer instruments
- D. Negotiation is not allowed for promissory notes
Answer: B. Negotiation generally gives a better title to a holder in due course
A holder in due course can obtain a better title through negotiation than the transferor had, which is a special advantage of negotiable instruments.
A holder in due course can obtain a better title through negotiation than the transferor had, which is a special advantage of negotiable instruments.
Which of the following statements about a cheque is most accurate?
- A. It must always be accepted before payment
- B. It is a bill of exchange payable only after a fixed period
- C. It is a bill of exchange drawn on a banker and payable on demand
- D. It is not a negotiable instrument
Answer: C. It is a bill of exchange drawn on a banker and payable on demand
A cheque is a special type of bill of exchange drawn on a banker and is payable on demand. It does not require acceptance like a bill of exchange.
A cheque is a special type of bill of exchange drawn on a banker and is payable on demand. It does not require acceptance like a bill of exchange.