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Created on February 04, 2026 By

CA Sonal Saboo

CMA Inter

Inter Business Laws and Ethics PN-5 Quiz 4

This quiz is based on the CMA Business Laws and Ethics paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA law concepts.

1 / 25

Category: Business Laws and Ethics PN-5

1. The right of 'Stoppage in transit' can be exercised by an unpaid seller when the:

a. buyer is solvent

b. buyer becomes insolvent

c. goods are in the possession of the seller

d. seller is happy

2 / 25

Category: Business Laws and Ethics PN-5

2. An 'Unpaid Seller' is one who:

a. has not been paid the whole of the price

b. has received a bill of exchange which has been dishonoured

c. either (a) or (b)

d. none of the above

3 / 25

Category: Business Laws and Ethics PN-5

3. The doctrine of 'Caveat Emptor' means:

a. Let the buyer beware

b. Let the seller beware

c. Let the goods be of good quality

d. None of the above

4 / 25

Category: Business Laws and Ethics PN-5

4. A 'Warranty' is a stipulation:

a. essential to the main purpose

b. collateral to the main purpose of the contract

c. which can be ignored

d. none of the above

5 / 25

Category: Business Laws and Ethics PN-5

5. A 'Condition' is a stipulation:

a. essential to the main purpose of the contract

b. collateral to the main purpose of the contract

c. which is not important

d. none of the above

6 / 25

Category: Business Laws and Ethics PN-5

6. 'Existing goods' are those which are:

a. owned or possessed by the seller at the time of contract

b. to be manufactured after the contract

c. whose acquisition depends on a contingency

d. none of the above

7 / 25

Category: Business Laws and Ethics PN-5

7. 'Goods' under the Sale of Goods Act includes:

a. Stock and shares

b. Growing crops

c. Grass

d. All of the above

8 / 25

Category: Business Laws and Ethics PN-5

8. A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the:

a. possession of goods

b. property in goods

c. storage of goods

d. none of the above

9 / 25

Category: Business Laws and Ethics PN-5

9. The Sale of Goods Act, 1930 deals with:

a. Movable goods

b. Immovable goods

c. Both (a) and (b)

d. None of the above

10 / 25

Category: Business Laws and Ethics PN-5

10. Which of the following is NOT a type of crossing?

a. General Crossing

b. Special Crossing

c. Double Crossing

d. Restrictive Crossing

11 / 25

Category: Business Laws and Ethics PN-5

11. 'Crossing of a cheque' is a direction to the:

a. paying banker

b. drawer

c. payee

d. collecting banker

12 / 25

Category: Business Laws and Ethics PN-5

12. A bill or note is at maturity on the:

a. third day after the day on which it is expressed to be payable

b. day on which it is payable

c. second day after it is payable

d. none of the above

13 / 25

Category: Business Laws and Ethics PN-5

13. The maturity of a promissory note or bill of exchange is the date:

a. on which it is expressed to be payable

b. at which it falls due

c. on which it is presented

d. none of the above

14 / 25

Category: Business Laws and Ethics PN-5

14. Which is NOT an example of 'Promissory Note'?

a. I acknowledge myself to be indebted to B in Rs. 1,000, to be paid on demand, for value received.

b. Mr. B, I.O.U. Rs. 1,000.

c. I promise to pay B or order Rs. 500.

d. I acknowledge myself to be indebted to B in Rs. 1,000 to be paid on demand.

15 / 25

Category: Business Laws and Ethics PN-5

15. A promissory note must be:

a. in writing

b. contain an unconditional undertaking

c. signed by the maker

d. all of the above

16 / 25

Category: Business Laws and Ethics PN-5

16. 'Notice of dishonour' must be given by:

a. holder to all parties whom he seeks to make liable

b. maker to the holder

c. drawee to the drawer

d. none of the above

17 / 25

Category: Business Laws and Ethics PN-5

17. 'Dishonour by non-payment' happens when the:

a. maker, acceptor or drawee makes default in payment

b. drawer makes default

c. payee refuses to accept

d. none of the above

18 / 25

Category: Business Laws and Ethics PN-5

18. When the endorser signs his name only on the instrument, it is called:

a. Endorsement in blank

b. Endorsement in full

c. Restrictive endorsement

d. Conditional endorsement

19 / 25

Category: Business Laws and Ethics PN-5

19. Negotiation of an instrument to any person so as to constitute that person the holder thereof is:

a. Negotiation

b. Assignment

c. Transfer

d. Endorsement

20 / 25

Category: Business Laws and Ethics PN-5

20. A 'Holder in due course' is a person who becomes the possessor of the instrument

a. for consideration

b. before the amount mentioned in it became payable

c. without having sufficient cause to believe that any defect existed in the title

d. all of the above

21 / 25

Category: Business Laws and Ethics PN-5

21. A cheque is a:

a. Promissory Note

b. Bill of Exchange drawn on a specified banker

c. Hundi

d. None of the above

22 / 25

Category: Business Laws and Ethics PN-5

22. The person who makes the bill of exchange is called:

a. Drawee

b. Drawer

c. Payee

d. Acceptor

23 / 25

Category: Business Laws and Ethics PN-5

23. How many parties are there in a Promissory Note?

a. Two

b. Three

c. Four

d. Five

24 / 25

Category: Business Laws and Ethics PN-5

24. A 'Negotiable Instrument' means a promissory note, bill of exchange or cheque payable:

a. to order

b. to bearer

c. either to order or to bearer

d. none of the above

25 / 25

Category: Business Laws and Ethics PN-5

25. A sub-agent is a person:

a. employed by and acting under the control of the original agent

b. employed by the principal

c. acting independently

d. none of the above

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Inter PN-5 Business Laws and Ethics Quiz 4

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