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Bill of Exchange Test - 7

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Bill of Exchange Test - 7
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  • Question 1
    1 / -0

    On 01.01.2013, A draws a bill on B for Rs. 10000. On maturity, B requests A to renew the bill for 2 month at 12 % p.a interest. Amount of interest will be

    Solution

    Amount due = Rs.10000

    Interest = 10000 × 12/100 × 2/12 = Rs.200

  • Question 2
    1 / -0

    Ram sold goods to Shyam for Rs. 400000. Half of the amount will be received in cash and the balance settled through B/R. For what amount, Ram should draw the bill on Shyam?

    Solution

    Amount payable in cash=1/2×400000=200000

    Amount settled through B/R=400000−200000=Rs.200000

     

  • Question 3
    1 / -0

    A Bill of Exchange contains :

    Solution

    As per section 5 of the negotiable instrument Act, 1881, a bill of exchange contains an unconditional order to pay.

  • Question 4
    1 / -0

    On 01.01.2012, A draws a bill on B for 3 months for Rs.10000. On 04.03.2012, B pays the amount due to A before maturity at 12 % discount. The amount of discount will be

    Solution

    The amount due has been paid 1 month in advance. The amount of interest will be calculated as follows:

    = 10000 × 12/100 × 1/12 = Rs.100

     

  • Question 5
    1 / -0

    A Bill of Exchange drawn on 4th of April,1994 for 2 months will mature on :

    Solution

    Date of maturity of bill= 4 April 1994+2 months+3days(days of grace)

     = 7 June 1994

  • Question 6
    1 / -0

    M draws a bill on N for Rs.3000.M endorsed to P.N will pay the amount of bill to

    Solution

    the amount of bill is paid by the drawee to the payee. in this case, P is a payee. hence the amount of bill is paid by N to P.

  • Question 7
    1 / -0

    A Bill Drawn will be accepted by the:

    Solution

    a bill of exchange is drawn on drawee, i.e, creditor. hence creditor accepts the bill.

  • Question 8
    1 / -0

    A sold goods to B for Rs. 100000. B paid Rs.30000 in cash. A grants 2% discount on the balance and B requests A to draw a bill for balance. The amount of bill will be

    Solution

    Amount due=Rs.70000

    Discount = 70000 × 2/100 = Rs.1400

    Amount of bill = 70000 − 1400 = Rs.68600

     

  • Question 9
    1 / -0

    Noting charge is a fee paid to the Notary Public for noting and __________

    Solution

    'noting charges paid' is a proof that bill was dishonoured.

  • Question 10
    1 / -0

    On 1st Jan 2013 B sold goods to A for Rs. 250. A gave to B his acceptance payable 1 month after date. Before maturity A request B to renew it which B does adding Rs.10 to the new Bill for interest. What will be the journal entry when new boo drawn on A in place of old bill duly accepted by A

    Solution

    why bill receivable debited? = since a new bill is issued, as a result, bill receivable is increased. hence bill receivable is debited.

     why A's A/C is credited? =   since a new bill is issued, as a result, A's liability as a creditor is ceased. hence A's A/C is credited.

  • Question 11
    1 / -0

    Which of the following is not the part of Bill of Exchange :

    Solution

    bill of exchange has three parties namely the drawer, the drawee, and the payee. hence notary is not the part of the bill of exchange.

  • Question 12
    1 / -0

    Notary Public is an officer appointed by the ___________

    Solution

    NOTARY PUBLIC=the notary public is an officer appointed by the central or state government to exercise the power and functions relating to noting and protesting of negotiable instruments for dishonour.

  • Question 13
    1 / -0

    Noting charge is an expense for :

    Solution

    Noting charges is initially paid by the drawer but it is subsequently recovered by the drawer from the drawee. hence, noting charges is an expense for drawee.

  • Question 14
    1 / -0

    A Promissory Note has two parties namely_________

    Solution

    a promissory note has two parties namely:-

    the promisor/maker: the person who makes the promise to pay the amount and avails the credit such person is known as the maker.

    the payee: the person to whom payment is to be made and who grants the credit such person is known as the payee.

  • Question 15
    1 / -0

    X draws a bill on Y for Rs.20000 for 3 months on 01.01.2012. The bill is discounted with the banker at a charge of Rs. 100. At maturity the bill returned dishonored. In the books of X for dishonor the bank account will be credited by

    Solution

    If a bill is discounted with the bank and is dishonoured, the journal entry will be;

    Y's A/C       Dr       20,000

       To Bank A/C          20,000

    (being bill dishonoured)

  • Question 16
    1 / -0

    On 01.01.2012, X draws a bill on Y for Rs.30000. At maturity, the bill is dishonoured and Y requests X to draw a fresh bill for 2 months together with 12 % p.a interest .Noting charges amount to Rs.100 .The amount of interest will be

    Solution

    Amount due from Y= 30000 + 100 = Rs.30100

    Amount of interest = 30100× 12/100 × 2/12 = Rs.602

  • Question 17
    1 / -0

    A Promissory Note is prepared by :

    Solution

    a promissory note is prepared by the debtor i.e the person who has availed the credit.

  • Question 18
    1 / -0

    Kite is the name of :

    Solution

    kite bill is also known as accommodation bill. it's is a bill issued for mutual help.

  • Question 19
    1 / -0

    Rohit's acceptance to Deepak for Rs.8000 renewed at 3 months on the condition that 4000 be paid in cash immediately and the remaining amount will carry interest @ 12 % p.a . The amount of interest will be

    Solution

    Total amount = Rs.8000

    Cash payment = Rs.4000

    Balance amount = 8000−4000=Rs.4000

    Interest = 4000×12/100 × 3/12 = Rs.120

     

  • Question 20
    1 / -0

    Noting is necessary in case of __________

    Solution

    noting charges is necessary in the case of promissory note. because it serves as a proof, in the case of dishonour of the bill.

  • Question 21
    1 / -0

    A Promissory note contains :

    Solution

    a promissory note contains a promise to pay the specified amount.

  • Question 22
    1 / -0

    A Bill received and deposited with the bank on the same day is known as _____

    Solution

    BILL SENT FOR COLLECTION= when a bill is sent to the bank with an instruction that the bill be retained till the date of maturity and realised it on the due date. it is called bill sent for collection.

  • Question 23
    1 / -0

    On 01.01.2012, A draws a bill on B for Rs.50000 for 3 months. A got the bill discounted on 04.01.2012 at 12% p.a. The amount of discount on bill will be

    Solution

    Discount on bill/Discounting charges = 50000 × 12/100 × 3/12 = Rs.1500

     

  • Question 24
    1 / -0

    A Bill of Exchange is prepared by :

    Solution

    Bill of exchange is drawn by the creditor i.e seller of goods or who granted credit to the person on whom the bill of exchange is drawn.

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