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Bills of Exchange Test 9

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Bills of Exchange Test 9
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Weekly Quiz Competition
  • Question 1
    1 / -0
    X draws a bill of exchange of $$Rs. 5,000$$ on B for $$4$$ months on $$15th\ February$$. The due date of the bill is ________.
  • Question 2
    1 / -0
    R draws a bill of exchange on S for $$Rs. 8,000$$ for $$4$$ months. He got it discounted with a Bank at $$12$$% p.a. The net proceeds to be received from bank will be _______.
    Solution

  • Question 3
    1 / -0
    A foreign bill is generally drawn in __________.
    Solution
    A bill which is not the inland bill is a foreign bill. The following types of bills are called foreign bills of exchange. 
    1. A bill is drawn outsie India and made payable outside India. 
    2. A bill drawn outside India and made payable in India.
    3. A bill drawn outside India on any person residing outside India.
    4. A bill drawn outside India on a person residing in India.
    The foreign bills are generally drawn in set of 3 each and each set is termed as a 'via' and dispatched to the drawee in 3 different modes of mail service to avoid delay. A foreign bill is generally drawn in duplicate..
  • Question 4
    1 / -0
    A draws a bill of exchange of $$Rs. 2500$$ on B for $$4$$ months on $$2nd$$ February. The due date of the bill of exchange will be ___________.
  • Question 5
    1 / -0
    A draw a bill of exchange on $$B$$ for $$Rs. 3,000$$ for $$4$$ months. He got it discounted with a Bank at $$12$$% p.a. The discount charged by the bank will be _________.
  • Question 6
    1 / -0
    Bill drawn and accepted for genuine trade transaction is called _________.
    Solution
    Bills of exchange or promissory notes are drawn to finance the actual transactions in goods, i.e., an acceptance is made to settle a trade debt owing to the drawer by the drawee in case of a bill of exchange  and the bill is called a trade bill. As it originates from genuine trade transaction it is for value received and is enforceable. 
  • Question 7
    1 / -0
    If X send goods to Y to sell the same at the risk and cost of X, This is a case of__________.
  • Question 8
    1 / -0
    Mr. X accepted a bill of exchange of $$Rs. 1500$$ drawn by Y and payable in $$3$$ months. He got it discounted from bank at $$2$$% discount. The discounting charges amounted to __________.
    Solution
    A bill is drawn by the drawer(debtor) on the drawee (creditor) so as to give him a sense of  security for the receivables. But in case the drawer does not want to wait till the maturity period of the bill or rather he has some urgent need of funds, what he will do is get the bill discounted by a bank. When the bill is discounted by the bank, it pays the drawer an amount after deducting a certain percentage, because they are giving the drawer the funds he needs before the date of maturity of the bill and the discount is a type of fee for their service. So here in this case the amount of discount is calculated as follows:
    Discount = $$Rs. 1500$$ x $$2/100$$= $$Rs. 30$$
    Remember here the discount percentage is in not expressed as per annum so do not multiply it with the number of months. 
  • Question 9
    1 / -0
    X draw a 3 months bill of exchange of Rs. 20,000 on Y on 1st April 14. On due date Y paid Rs. 4000 and requested X to draw another bill of exchange for 2 months. On the due date of second bill of exchange Y is declared involvement and a dividend of 25 paise in a rupee is expedited to be realized from his assets. Find the amount receivable from Y in respect of the outstanding bill of exchange.

  • Question 10
    1 / -0
    Who bears noting charges in case of dishonour of a bill of exchange.

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