Bill of Exchange Test

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Bill of Exchange Test - 14

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Weekly Quiz Competition

Question 1
1 / -0

Susan buys a used car for $$\$ 6, 500$$ and finances it by making monthly payments of $$\$ 325$$. How long will take her to pay for the car?

A
$$16$$ months

B
$$17$$ months

C
$$18$$ months

D
$$19$$ months

E
$$20$$ months

Solution

Car is for Rs. $$6,500$$ and he makes monthly payments of Rs. $$325$$.
Therefore, number of months taken to pay for the car $$ = \dfrac { 6,500}{325} = 20 $$ months.
Question 2
1 / -0

Ashok spends 1/8 of the money for mangoes and 1/7 of the remaining money for sweets and then with the left over money, he goes to a bakery and spends 1/6 of the money to buy bread for his father and with the remaining money, he spends 1/5 and buys flowers for his sister and from the amount left over, he buys a cricket ball by spending 1/4 ofthe amount. Now, he is left with Rs48, How much money Ashok had at the beginning?

A
Rs 90

B
Rs 128

C
Rs 100

D
18 cm

Solution

$$\\ Let\quad the\quad total\quad money\quad be\quad x.\\ x\times \dfrac { 7 }{ 8 } \times\dfrac { 6 }{ 7 } \times \dfrac { 5 }{ 6 } \times \dfrac { 4 }{ 5 } \times \dfrac { 3 }{ 4 } =48\\ \dfrac { 3 }{ 8 } x=48\\ x=128\\ $$
Question 3
1 / -0

When a bill is drawn by A on B, and before the maturity date, B becomes insolvent then in the books of A it is debited to _____________.

A
Bills Receivable Account

B
Bank Account

C
B's Account

D
Bank for Collection of Bills

Solution

Insolvent is the person whose assets are not sufficient to pay off his liabilities in full.
In case of insolvency of the acceptor, the holder would get the proportionate amount of what is due from the bill.
The journal entry for the transaction should be :-
B's A/c Dr.
To Bills receivables A/c
Question 4
1 / -0

The account current method in which the days are calculated from the date of transaction to the commencement date is known as ____________.

A
Forward method

B
Epoch method

C
Daily Balance Method

D
Backward Method

Solution

This is the reverse of the product method. The number of days are calculated from the beginning of the accounting period to the date of transaction.
Question 5
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 6
1 / -0

Base date is otherwise called as _________.

A
Zero date

B
Leave date

C
Working days

D
Grace days

Solution

Base date is also named as reference date. Its the date which is used for comparing the changes in condition with the upcoming date or event.
Base date is also termed as Zero Date.
For example, if the base date is 1st Jan 2017 with an index of 100, if the index is 150 on 30th June 2017, it means index is 50% higher than the base date.
Question 7
1 / -0

When the holder of the bill discounts the bill, he shall debit ____________.

A
Bank Account

B
Bills receivable Account

C
Acceptor's Account

D
Cash Account

Solution

If the holder of the bill needs funds, he can approach the bank for encashment of the bill before the due date. The bank shall make the payment of the bill after deducting some interest. This process of encashing the bill with the bank is called discounting the bill whereby the holder of the bill gets money from the bank. While passing journal entry for discounting the bill the bank account is debited. The bank then recovers the amount from the drawee on the due date.
Question 8
1 / -0

If a cheque sent for collection is dishonored, the debit is given to _________.

A
Suppliers Account

B
Bank Account

C
Customers Account

D
Cash Account

Solution

At the time of receiving a cheque, customer account was credited, hence if the cheque bounces, a reverse entry has to be passed by debiting the customer account and crediting the bank account.
Question 9
1 / -0

A bill drawn and accepted for a genuine trade transaction is termed as a(n)_________ bill.

A
Trade

B
Time

C
Inland

D
Personal

Solution

Trade bill is a financial document ordering someone to pay a particular amount on a particular date against the purchase of goods.
Question 10
1 / -0

When a bill is discharged, the acceptor debits __________.

A
Creditor's account

B
Cash account

C
Bills payable account

D
Bills receivable account

Solution

A bill is discharged by payment in due course by or on behalf of the drawee or acceptor. While preparing the journal entry for discharge of bill Bills payable account is debited and Drawer account is credited.

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Bill of Exchange Test - 14

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Bill of Exchange Test - 14

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SHARING IS CARING

Question 1

$$16$$ months

$$17$$ months

$$18$$ months

$$19$$ months

$$20$$ months

Solution

Question 2

Rs 90

Rs 128

Rs 100

18 cm

Solution

Question 3

Bills Receivable Account

Bank Account

B's Account

Bank for Collection of Bills

Solution

Question 4

Forward method

Epoch method

Daily Balance Method

Backward Method

Solution

Question 5

Outward

Inward

Foreign

New

Solution

Question 6

Zero date

Leave date

Working days

Grace days

Solution

Question 7

Bank Account

Bills receivable Account

Acceptor's Account

Cash Account

Solution

Question 8

Suppliers Account

Bank Account

Customers Account

Cash Account

Solution

Question 9

Trade

Time

Inland

Personal

Solution

Question 10

Creditor's account

Cash account

Bills payable account

Bills receivable account

Solution

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Question Analysis

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