Bill of Exchange Test

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Bill of Exchange Test - 37

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Weekly Quiz Competition

Question 1
1 / -0

If a bill is. dishonoured, when presented for payment by third party, the drawer will debit:

A
Acceptors account

B
Third partys account

C
Neither of the two

D
None of the above
Question 2
1 / -0

At the time of retirement of a bill, the acceptor debits _____________.

A
Creditors Account

B
Bank Account

C
Discount Account

D
Bills Payable Account

Solution

Retiring of the Bill refers to the situation where the drawee upon whom the bill of exchange is drawn settles his account with the drawer prior to the expiry date agreed in the bill. The drawee or the acceptor of the bill debits the Bills Payable A/c and credits Cash/Bank A/c.
Question 3
1 / -0

Noting Charges account is debited by _________.

A
Drawer

B
Payee

C
Drawee

D
Endorsee

Solution

Noting charges Account is debited by the holder of the bill, i. e. drawee. It refers to the charges on the bills of exchange that was dishonor.
Question 4
1 / -0

If a bill is drawn on 29th June for 3 months, it will mature on:

A
1st October

B
2nd October

C
3rd October

D
None of the above

Solution

The term maturity refers the date on which a bill of exchange or a promissory note becomes due for payment. In arriving at the maturity date three days, known as days of grace, must be added to the date on which the period of credit expires instrument is payable.
Therefore, Maturity of the bill= Tenure+3 days of grace.
In the given case, Date of maturity = 29th June + 3 months + 3 days of grace
Date of maturity= 1st October.
But on 2nd October, it is Gandhi Jayanti(Public Holiday) hence, preceding day is considered. Therefore, 1st October is the date of Maturity.
Question 5
1 / -0

A draws a bill on B for Rs. $$30,000$$. A wants to endorse it to C in settlement of Rs. $$35,000$$ at $$2\%$$ discount with the help of B's acceptance and balance in cash. How much cash A will pay to C?

A
$$4,300$$

B
$$4,000$$

C
$$4,100$$

D
$$5,000$$

Solution

Amount to be paid y A to C after discount= Rs. 35000 - (35000x2/100)
= Rs. 35000 - 700
= Rs. 34300
Amount to be settled by bill= Rs. 30000
Remaining amount to be paid in cash= Rs. 34300 - 30000
= Rs. 4300
Therefore A is the correct option.
Question 6
1 / -0

A bill of exchange contains a/an _________________.

A
Unconditional undertaking

B
Unconditional order

C
Conditional undertaking

D
Conditional order
Question 7
1 / -0

If an instrument may be constructed either as a promissory note or bill of exchange, it is ________________.

A
A valid instrument

B
An ambiguous instrument

C
A returnable instrument

D
None of the above
Question 8
1 / -0

Under section 118 of the Negotiable Instruments Act, 1881 it is presumed, until the contrary is proved, that every transfer of negotiable instrument was made ___________________.

A
After its maturity

B
Before its maturity

C
At its maturity

D
None of the above

Solution

As per the the provision of section 118 of The Negotiable Instruments Act, 1881 it is presumed, until the contrary is proved, as to the time of transfer that every transfer of negotiable instrument was made before its maturity.
Therefore, B is the correct option.
Question 9
1 / -0

A bills of exchange not covered under negotiable Act. are _______.

A
Hundis

B
Share dividend warranty

C
Promissory note

D
Bearer debentures
Question 10
1 / -0

The term 'Negotiable Instrument' is defined in the Negotiable Instruments Act, 1881 under section __________.

A
12

B
13

C
13(1)

D
None of the above

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Bill of Exchange Test - 37

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Bill of Exchange Test - 37

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SHARING IS CARING

Question 1

Acceptors account

Third partys account

Neither of the two

None of the above

Question 2

Creditors Account

Bank Account

Discount Account

Bills Payable Account

Solution

Question 3

Drawer

Payee

Drawee

Endorsee

Solution

Question 4

1st October

2nd October

3rd October

None of the above

Solution

Question 5

$$4,300$$

$$4,000$$

$$4,100$$

$$5,000$$

Solution

Question 6

Unconditional undertaking

Unconditional order

Conditional undertaking

Conditional order

Question 7

A valid instrument

An ambiguous instrument

A returnable instrument

None of the above

Question 8

After its maturity

Before its maturity

At its maturity

None of the above

Solution

Question 9

Hundis

Share dividend warranty

Promissory note

Bearer debentures

Question 10

12

13

13(1)

None of the above

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