Bill of Exchange Test

Result

Bill of Exchange Test - 19

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Weekly Quiz Competition

Question 1
1 / -0

Encashment of bill before due date ________________.

A
Retirement of bill

B
Discounting of bill

C
Honouring of bill

D
Endorsing of bill

Solution

When bill is sold to the bank at a discounted rate it is called discounting the bill of exchange.
As cash is received on discounting the bill it is also called encashment.
Question 2
1 / -0

Payment of bill on its due date is known as ________________.

A
Honouring of bill

B
Dishonouring of bill

C
Renewal of bill

D
Discounting of bill

Solution

When the Drawee makes payment of the bill after its exact tenure i.e on its due date, it is said that the bill is honoured.
Question 3
1 / -0

The person on whose favor a bill is endorsed is called as _______.

A
Endorser

B
Endorsee

C
Drawer

D
Drawee

Solution

The person, either the drawer or holder, who endorses the bill to any one by signing on the back of it is called an endorser.
And the person on whose favor a bill is endorsed is called as Endorsee.
Question 4
1 / -0

Noting charges is borne by _______.

A
Drawee

B
Drawer

C
Endorser

D
None

Solution

Noting charges are the amounts paid by the drawer to notary , who warns the drawee of the bill to get clear in a specific time period .
Question 5
1 / -0

When Bill is Dishonored ___________ is Debited in drawers books.

A
Drawee A/c

B
Endorse A/c

C
Bank for Collection A/c

D
Bill Receivable A/c
Question 6
1 / -0

when bill is dishonored ___________ account is Debited along with Bill payable A/c for recording noting charges.

A
Noting Charges A/c

B
Cash A/c

C
Drawer A/c

D
None

Solution

When a Bill of Exchange is dishonoured, in order to prove the fact, the drawer (or holder) may get the bill of exchange noted and protested through a public official known as “Notary Public” Noting is the recording of the fact of dishonour by a Notary public which becomes an evidence of dishonour.
Journal Entry :-
Noting Charges A/c Dr.
To Bills Payable A/c.
Question 7
1 / -0

Drawee or payee in whose favor the promissory note is drawn is also called as________.

A
Promisee

B
Promisor

C
Creditor

D
Debtor

Solution

The person to whom the promise to pay a sum of amount is made is called promisee. He is the person in whose favor the promissory note is drawn.
Question 8
1 / -0

On due date when Drawee Fails to make the payment of the bill _____________.

A
Bill is Honored

B
Bill is Dishonored

C
Bill is cancelled

D
None of the above

Solution

Dishonour of a bill of exchange occurs when the drawee fails to settle the payment on the date of maturity. When the bill of exchange is dishonoured, the liability of the acceptor is restored (he/she becomes the debtor again).
Question 9
1 / -0

Drawee Passes __________ journal entry for bill Retained , Discounted or Pledged.

A
Cash A/c Dr

To Bill Payable A/c

B
Cash A/c Dr

To Bill Receivable A/c

C
Bill Payable Dr

To Drawer A/c

D
No Entry
Question 10
1 / -0

A bill of Rs 23000 dishonoured and noting charges paid by Drawer is Rs. 100 than Drawee's A/c will be Debited for Rs. __________.

A
23100

B
23000

C
100

D
none

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Re-Attempt Weekly Quiz Competition

Bill of Exchange Test - 19

Result

Bill of Exchange Test - 19

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Rank

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SHARING IS CARING

Question 1

Retirement of bill

Discounting of bill

Honouring of bill

Endorsing of bill

Solution

Question 2

Honouring of bill

Dishonouring of bill

Renewal of bill

Discounting of bill

Solution

Question 3

Endorser

Endorsee

Drawer

Drawee

Solution

Question 4

Drawee

Drawer

Endorser

None

Solution

Question 5

Drawee A/c

Endorse A/c

Bank for Collection A/c

Bill Receivable A/c

Question 6

Noting Charges A/c

Cash A/c

Drawer A/c

None

Solution

Question 7

Promisee

Promisor

Creditor

Debtor

Solution

Question 8

Bill is Honored

Bill is Dishonored

Bill is cancelled

None of the above

Solution

Question 9

Cash A/c DrTo Bill Payable A/c

Cash A/c DrTo Bill Receivable A/c

Bill Payable DrTo Drawer A/c

No Entry

Question 10

23100

23000

100

none

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Question Analysis

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Cash A/c Dr

To Bill Payable A/c

Cash A/c Dr

To Bill Receivable A/c

Bill Payable Dr

To Drawer A/c