Bill of Exchange Test

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Bill of Exchange Test - 21

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Weekly Quiz Competition

Question 1
1 / -0

During renewal of the bill the old bill is _____________ and fresh bill is accepted.

A
cancelled

B
dishonored

C
retired

D
none
Question 2
1 / -0

When drawee approaches the drawer for further extension of bill it is known as __________________.

A
Renewal of the bill

B
Retirement of the Bill

C
Drawing of the Bill

D
Dishonoring of the Bill
Question 3
1 / -0

Discount allowed by the holder of the bill to encourage retirement is called _____.

A
discount

B
rebate

C
both

D
none
Question 4
1 / -0

When bill is retired , What will be the entry in the books of Drawee ?

A
Bill payable A/c Dr

To Cash A/c

To Discount A/c

B
Bill payable A/c Dr

To Cash A/c

To Rebate A/c

C
No Entry

D
None of the Above
Question 5
1 / -0

A letter of credit is

A
A short-term credit by a bank to an importer

B
A guarantee to honour the bills of an exporter drawn within stipulated term

C
A guarantee by a bank to discount all the bills of an exporter

D
A short-term credit by the bank to an exporter against a confirmed order

E
Both (B) and (C) above
Question 6
1 / -0

A bill of Rs. 5000 is being renewed for next 3 month with interest @ 12 % p.a
ascertain the Interest Amount __________.

A
100

B
175

C
150

D
155
Question 7
1 / -0

Which of the following statements is / are true?

A
Bill of exchange is a non-negotiable instrument

B
Bill of lading is a receipt issued by shipping company acknowledging receipt of goods

C
Marine insurance policy does not cover the loss / damage caused by delay

D
Both (A) and (B) above

E
Both (B) and (C) above
Question 8
1 / -0

A confirmed letter of credit is one which

A
Is availed by the importer's bank

B
Is guaranteed by a bank acceptable to the exporter

C
Is irrevocable

D
Is payable at sight

E
Has all the features
Question 9
1 / -0

A bill of Rs.10000 Retired one month before due date @12% p.a , ascertain the rebate allowed ____________.

A
100

B
105

C
110

D
120
Question 10
1 / -0

Bill of exchange is drawn by ________.

A
creditor

B
debtor

C
customer

D
any of the above

Solution

According to Negotiable Instruments Act, 1881, a bill of exchange is defined as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument. A bill of exchange is generally drawn by the creditor upon his debtor.

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Bill of Exchange Test - 21

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Bill of Exchange Test - 21

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SHARING IS CARING

Question 1

cancelled

dishonored

retired

none

Question 2

Renewal of the bill

Retirement of the Bill

Drawing of the Bill

Dishonoring of the Bill

Question 3

discount

rebate

both

none

Question 4

Bill payable A/c DrTo Cash A/cTo Discount A/c

Bill payable A/c DrTo Cash A/cTo Rebate A/c

No Entry

None of the Above

Question 5

A short-term credit by a bank to an importer

A guarantee to honour the bills of an exporter drawn within stipulated term

A guarantee by a bank to discount all the bills of an exporter

A short-term credit by the bank to an exporter against a confirmed order

Both (B) and (C) above

Question 6

100

175

150

155

Question 7

Bill of exchange is a non-negotiable instrument

Bill of lading is a receipt issued by shipping company acknowledging receipt of goods

Marine insurance policy does not cover the loss / damage caused by delay

Both (A) and (B) above

Both (B) and (C) above

Question 8

Is availed by the importer's bank

Is guaranteed by a bank acceptable to the exporter

Is irrevocable

Is payable at sight

Has all the features

Question 9

100

105

110

120

Question 10

creditor

debtor

customer

any of the above

Solution

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Question Analysis

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Bill payable A/c Dr

To Cash A/c

To Discount A/c

Bill payable A/c Dr

To Cash A/c

To Rebate A/c