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Bill of Exchange Test - 44

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Bill of Exchange Test - 44
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Weekly Quiz Competition
  • Question 1
    1 / -0
    Which of the following instrument cannot be made payable to the bearer?
    Solution
    • Promissory Note :-  The sum should be payable to a certain person. There are only two parties to a Promissory Note, one is the maker or the payer and another one is the payee. It is not transferable and thus, the amount is not payable to the bearer.
    • A cheque which is payable to any person who presents it for payment at the bank counter is called 'Bearer cheque'.
    • When a bill of exchange is payable to bearer, it means whoever holds the bill can receive the payment due on it. 
    • “ Bearer ” means the person in possession of a bill or note which is payable to bearer. 
  • Question 2
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    S a resident of Haridwar draw a bill of exchange of $$Rs. 5000$$ upon Y payable in Rishikesh. This is a ___________.
    Solution
    A bill which is (i) drawn or made in India and also made payable in India or (ii) drawn or made in India upon any resident in India, although it may be made payable in a foreign country, is deemed to be an inland bill. 
    Example: A bill of exchange drawn in Bombay and made payable in Delhi, although the drawee may be residing outside India. Or a bill of exchange drawn in Madras on a person resident in Delhi, although it may be payable outside.
    S, a resident of Haridwar draws a bill of exchange of Rs. 5,000 upon Y payable in Rishikesh is an inland bill.
  • Question 3
    1 / -0
    Which of the following is a Foreign Bill?
    Solution
    Foreign bill is a bill of exchange drawn in one state or country and payable in another , as one arising from foreign trade operations. 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 outside 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 3 sets and each set is termed as a via and dispatched to the drawee in 3 different modes of mail services to avoid delay. As soon as one set of them is paid, the other two becomes inoperative.
  • Question 4
    1 / -0
    S a resident of Sydney draw a bill of exchange of $$Rs. 5000$$ upon Y payable in Tokyo. This is a __________.
    Solution
    A bill which is not an inland bill, is deemed to be a foreign bill.
    Example: A bill of exchange drawn in India, on a person residing outside India and made payable outside India.
    A bill drawn outside India and made payable in India. 
    A bill drawn outside India, on a person residing in India.
    S, a resident of Sydney draws a bill of exchange of Rs. 5,000 upon Y payable in Tokyo is an example of foreign bill.

  • Question 5
    1 / -0
    _________ can be a payee also.
    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. There are three parties to a bill of exchange. Drawer is the maker of the bill of exchange. A seller/creditor who is entitled to receive money from the debtor can draw a bill of exchange upon the buyer/debtor. The drawer after writing the bill of exchange it as a maker of the bill of exchange. The drawer can be a payee also.
  • Question 6
    1 / -0
    A bill dated $$1st\ January\ 2014$$ is a payable $$60$$ days after date. The maturity date of the bill will be _________.
    Solution
    The term maturity refers to 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. A bill dated 1st January 2014 is payable 60 days after date, it falls on 5th March, 2014 i.e. 63 days after 1st January if it were payable 60 days after date.
  • Question 7
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    Which of these accounts is debited by a drawee of a bill of exchange on its discounting?
  • Question 8
    1 / -0
    A draws a bill exchange of $$Rs. 2000$$ on B for $$3$$ month on $$23 - 11 - 2013$$. The due date of the bill of exchange will be __________.
  • Question 9
    1 / -0
    Shyam draws a bill of exchange on Raj for $$Rs. 2000$$ payable in $$3$$ months. On the due date Raj could not make the payment and requested Shyam to renew a fresh bill for another three months at $$12$$% interest p.a. The interest to be charged on fresh bill will be _____________.
  • Question 10
    1 / -0
    _________ bears the interest charges on renewal of a bill of exchange on dishonourment.
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