1. Person named in the instrument to whom or to whose order the money is to be paid is known as ______
1. Drawer
2. Drawee
3. Payer
4. Payee
5. Endorser
Option “4” is correct. The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.
2. Which of the following are the duties of a collecting banker?
1. Due care and diligence in the collection of cheques.
2. Presentation of cheque within a reasonable time.
3. Remittance of proceeds of the cheques.
4. Only a & b
5. All a, b & c
Option “5” is correct. The duties of a collecting banker are- (a) Due care and diligence in the collection of cheques. (b) Presentation of cheque within a reasonable time (c) Remittance of proceeds of the cheques
3. Which section of the Negotiable Instrument Act, 1881 describes about “Cheque”?
Option “3” is correct. Section 6 of Negotiable Instruments Act 1881: “Cheque” A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. Other Sections signifies- · Section 4- Promissory Note · Section 5- Bill of exchange · Section 7- Drawer, Drawee · Section 8- Holder
4. Identify the correct statement regarding a Cheque-
1. A type of Bank note
2. Includes the electronic image of a truncated
3. Payable on conditional
4. A type of promissory note
5. All of the above
Option “2” is correct. · An Electronic Cheque is a cheque drawn in electronic form by using any computer resource and signed with a digital signature. · A Cheque is a payment instrument drawn on a specified Banker not expressed to be payable otherwise than on demand. · It includes the electronic image of a truncated cheque and a cheque in the electronic form.
5. Section 143(A) provides for a maximum of ______ of the cheque amount to be awarded as interim compensation to protect the complainant’s interest till the trial against the person who has issued the dishonoured cheque is completed.
1. 10%
2. 20%
3. 30%
4. 40%
5. 50%
Option “2” is correct. Section 143(A) provides for a maximum of 20% of the cheque amount to be awarded as interim compensation to protect the complainant’s interest till the trial against the person who has issued the dishonoured cheque is completed.
6. A _______ is a document that orders a bank to pay a specific amount of money from a person’s account to the person in whose name the cheque has been issued.
1. Passbook
2. Promissory Note
3. Cheque
4. Bill of Exchange
5. Commercial Paper
Option “3” is correct. A cheque is a document that orders a bank to pay a specific amount of money from a person’s account to the person in whose name the cheque has been issued.
7. Which parties is/are included in a cheque transaction?
(i) Drawer
(ii) Drawee
(iii) Payee
1. Only (i)
2. Only (ii)
3. Only (i) & (ii)
4. Only (ii) & (iii)
5. All (i), (ii) & (iii)
Option “5” is correct. Parties are included in the process of Cheque- · Drawer– A person who issues the cheques and holds the bank account · Drawee– It is a financial institution · Payee– The person whose name appears on the cheque; the person who will receive the funds (when transferred under banking guidelines)
8. It is important to note that a cheque remains valid for ________ post which, it becomes invalid.
Option “5” is correct. Another feature of cheques is that they are usually valid only for six months. They do not require any stamping as other negotiable instruments do.
9. Which of the following is Not a type of Cheque?
1. Order Cheque
2. Disorder cheques
3. Open cheques
4. Crossed cheque
5. Traveller’s cheque
Option “1” is correct. Types of cheques- · Order Cheque · Bearer cheques · Open cheques · Crossed cheque · Blank cheque · Gift cheques · Bankers cheque · Stale cheques · Traveller’s cheque · Self cheques · Mutilated cheques
10. When the word “or bearer” printed on the cheque is cancelled and and the word ‘order’ may be written on the cheque, the cheque is called as-
1. Order Cheque
2. Bearer cheques
3. Open cheques
4. Crossed cheque
5. Blank cheque
Option “1” is correct. When the word “or bearer” printed on the cheque is cancelled and and the word ‘order’ may be written on the cheque, the cheque is called an order cheque. An order cheque is one which is payable to a particular person.
