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Bills of Exchange Test 18

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Bills of Exchange Test 18
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Weekly Quiz Competition
  • Question 1
    1 / -0
    On 1.6.05 X draws a bill on Y for Rs. 50,000. At maturity Y requested X to accept Rs. 10,000 and noting charges incurred Rs. 200 in cash and for the balance X draws a bill on Y for 2 months at 12% p.a. Interest amount will be _________.
  • Question 2
    1 / -0
    At the time of endorsement of a bill, the drawer credits _________.
    Solution
    Journal entry for the endorsement of the bill
    Endorsee A/c   Dr.                         XXX
       To Bill receivable A/c                          XXX
    (Being bill is endorsed)
    Therefore, C is the correct option.
  • Question 3
    1 / -0
    Which of the following instruments is not a negotiable instrument?
    Solution
    When a cheque, crossed generally or specially, contains the words, “Not Negotiable” on the face of the cheque, then such a cheque loses it special characteristics of “negotiability”.
  • Question 4
    1 / -0
    Under which circumstances drawer and payee is same person?
    Solution
     When drawer held the bill till maturity , the drawer and the payee is same person.
  • Question 5
    1 / -0
    For mutual accommodation of A and B, B accepted a bill drawn on him by A for 2 months Rs. 12,000. The said bill is discounted at 12% p.a and remitted 1/3rd of the proceeds to B. The amount remitted by A to B will be _________.
    Solution

  • Question 6
    1 / -0
    A bill of exchange contains ___________.
    Solution
    According to  section $$5$$ of the Negotiable Instrument Act $$1881$$, a bill of exchange is an unconditional order in writing directing a certain person to pay certain person or the bearer a sum of money. As you can see in the proforma of a bill of exchange given above there is no promise of any kind, instead the drawer has just written that the drawee has to pay him an amount of $$RS.800$$ after two months.

  • Question 7
    1 / -0
    Bills receivable discounted but not done till the date of final accounts is shown in ___________.
  • Question 8
    1 / -0
    X draws a bill on Y for Rs$$10,000$$. X endorsed it to Z. Y will pay the amount of the bill on maturity to _______.
    Solution
    When a bill of exchange is endorsed by the maker/drawer in the favour of his creditor, such creditor becomes the payee of the bill and gets entitled to receive the amount on its maturity. In this case, Z becomes the payee after endorsement, and hence, Z will receive the amount of the bill from Y.
  • Question 9
    1 / -0
    A bill from the point of view of a creditor is called  ___________ .
  • Question 10
    1 / -0
    A bill of exchange contains a/an _________________.
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