Bills of Exchange Test 3

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Bills of Exchange Test 3

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Weekly Quiz Competition

Question 1
1 / -0

When a bill drawn by A on B, is endorsed to C, later which was dishonoured on the due date, it is credited in the books of A to ____________.

A
Bank account

B
Bills receivable account

C
Bank for collection of bills account

D
C's account

Solution

A bill is said to have been dishonored when the drawee fails to make the payment on the date of maturity. The journal entry for the transaction "when a bill drawn by A on B endorsed to C is dishonored on the due date" is as follows:
B's A/c............Dr.
To C's A/c
Question 2
1 / -0

A bill of exchange payable after a certain period is known as __________ bill.

A
time

B
accommodation

C
revenue

D
dishonoured

Solution

Time bill is a financial documents which orders a person to make a payment of a particular amount at a particular time against the goods or services which are already taken.
Question 3
1 / -0

Average due date can be called as ________.

A
Mean due date

B
Median due date

C
Mode due date

D
Zero date

Solution

Average due date is defined as the mean date on which one payment may be made in lieu of multiple payment due on various dates keeping in mind that both the parties may not suffer with a loss of interest.
Question 4
1 / -0

Cancelling the original bill and drawing a fresh acceptance is known as __________.

A
Retiring under rebate

B
Renewal

C
Discounting

D
Bill sent to bank for collection

Solution

Sometimes the acceptor of the bill foresees that it may be difficult to meet the obligation of the bill on maturity and may, therefore, approach the drawer with the request for extension of time for payment. In such cases the old bill is cancelled and fresh bill with new terms of payment is drawn it is called as renewal of bill.
Question 5
1 / -0

Bill of exchange is sometimes known as ____________.

A
Near money

B
Transferable assets

C
Claims receivable

D
A post dated cheque

Solution

Bill of Exchange -A non-interest-bearing written order used primarily in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date. Bills of exchange are similar to cheque and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements.
Bill of exchange is a liquid asset and also can be discounted by bank before its maturity and hence it is sometimes known as near money.
Question 6
1 / -0

While preparing P/L account, rebate on bills discounted to be provided shall be deducted from discount received is ________.

A
Schedule 16

B
Schedule 15

C
Schedule 14

D
Schedule 13

Solution

Rebate on Bills Discounted is also known as Discount Received in Advance, or, Unexpired Discount or, Discount Received but not earned.
Its treatment is same as we do in the case of Interest Received in Advance.
Question 7
1 / -0

A bill which is not an inland bill is a ___________ bill.

A
Outward

B
Inward

C
Foreign

D
New

Solution

The foreign bill of exchange is a payment drawn up in one country that is payable in another country.
Question 8
1 / -0

In India, Commercial Papers are issued as per the guidelines issued by ______________.

A
Securities and Exchange Board of India

B
Reserve Bank of India

C
Forward Market Commission

D
None of the above

Solution

Commercial paper is an unsecured, short term debt instrument issued by a corporation, typically for the financing of account receivable, inventories and meeting short term liabilities.
Question 9
1 / -0

___________ days of grace are allowed in case of time bills for calculation date of maturity.

A
Five

B
Seven

C
Three

D
Two

Solution

Maturity means the date on which a bill of exchange falls due for payment. Every bill of exchange payable at a specified period after date is entitled to have a grace period of 3 days.
Question 10
1 / -0

Rebate on bills discounted is also called_____.

A
Unexpired discount

B
Earned discount

C
Expired discount

D
Received discount

Solution

Rebate on Bills Discounted is also known as Discount Received in Advance, or, Unexpired Discount or, Discount Received but not earned. Its treatment is same as we do in the case of Interest Received in Advance.

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Re-Attempt Weekly Quiz Competition

Bills of Exchange Test 3

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Bills of Exchange Test 3

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Question 1

Bank account

Bills receivable account

Bank for collection of bills account

C's account

Solution

Question 2

time

accommodation

revenue

dishonoured

Solution

Question 3

Mean due date

Median due date

Mode due date

Zero date

Solution

Question 4

Retiring under rebate

Renewal

Discounting

Bill sent to bank for collection

Solution

Question 5

Near money

Transferable assets

Claims receivable

A post dated cheque

Solution

Question 6

Schedule 16

Schedule 15

Schedule 14

Schedule 13

Solution

Question 7

Outward

Inward

Foreign

New

Solution

Question 8

Securities and Exchange Board of India

Reserve Bank of India

Forward Market Commission

None of the above

Solution

Question 9

Five

Seven

Three

Two

Solution

Question 10

Unexpired discount

Earned discount

Expired discount

Received discount

Solution

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