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CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Bills Of Exchange Quiz 7 - MCQExams.com
CBSE
Class 10 Elements Of Book Keeping And Accountancy
Bills Of Exchange
Quiz 7
A bill of exchange contains ___________.
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a promise
0%
an unconditional order
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a request to deliver the goods
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none of the above
Explanation
According to section $$5$$ of the Negotiable Instrument Act $$1881$$, a bill of exchange is an unconditional order in writing directing a certain person to pay certain person or the bearer a sum of money. As you can see in the proforma of a bill of exchange given above there is no promise of any kind, instead the drawer has just written that the drawee has to pay him an amount of $$RS.800$$ after two months.
Bills receivable discounted but not done till the date of final accounts is shown in ___________.
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profit & loss account
0%
assets
0%
liabilities
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notes to accounts
Explanation
A possible future liability, which depends on the happenings of a certain uncertain event
, is called contingent liability. These liabilities are not shown on the total liability side but are shown as a footnote to the balance sheet. Liabilities on Bills Receivable are discounted but not matured. Hence, the correct option is D.
X draws a bill on Y for Rs$$10,000$$. X endorsed it to Z. Y will pay the amount of the bill on maturity to _______.
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X
0%
Z
0%
Y
0%
None of the above
Explanation
When a bill of exchange is endorsed by the maker/drawer in the favour of his creditor, such creditor becomes the payee of the bill and gets entitled to receive the amount on its maturity. In this case, Z becomes the payee after endorsement, and hence, Z will receive the amount of the bill from Y.
A bill from the point of view of a creditor is called ___________ .
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bills payable
0%
bills receivable
0%
both of these
0%
none of these
A draws an accommodation bill on B. The proceeds are to be shared by A and B in the ratio of 3:The amount of bill is Rs. 6,000, discounting charges Rs.Discount borne by A will be ________.
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0%
Rs. 75
0%
Rs. 100
0%
Rs. 83
0%
none of the above
Explanation
When the proceeds of the bill of exchange are to be shared by A & B in ratio of 3 : 1, the discount expense incurred on discounting of the bill will also be incurred by them in the same ratio. Hence, A's share of discount will be Rs. 75 (100 x 3/4).
A bill of exchange contains a/an _________________.
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Unconditional undertaking
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Unconditional order
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Conditional undertaking
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Conditional order
Explanation
Bill of exchange
is an unconditional order to a person or drawee, to pay the specified amount. Hence, the correct answer is option B.
A draws a bill on B for Rs. 6,000 for mutual accommodation in the ratio 2:1, A got it discounted Rs. 5,800 and remitted 1/3rd of the proceeds to B. At the time of maturity, how much amount A should remit to B so that B can pay off the bill?
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Rs. 4,000
0%
Rs. 3,867
0%
Rs. 3,000
0%
Rs. 3,010
Explanation
A's remittance to B= Amount of bill x 2/3
= 6000 x 2/3
= Rs. 4000
Therefore, A is the correct option.
A drew a bill on B for Rs. $$50,000$$ for $$3$$ months. Proceeds are to be shared equally. A got the bill discounted at $$12\%$$ p.a. and remits required proceeds to B. The amount of such remittance will be.
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$$24,250$$
0%
$$25,000$$
0%
$$16,167$$
0%
$$32,333$$
A bill of exchange is a conditional order in writing given by a Debtor to a Creditor.
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True
0%
False
Explanation
Bills of exchange is an unconditional order signed by the maker, directing the debtor to pay a certain sum of money on a certain date or on the demand of the maker i.e., creditor.
Mr Bobby sold goods worth Rs. $$25,000$$ to Mr Bonny. Bonny immediately accepted a bill on $$1.11.01$$, payable after $$2$$ months. Bobby discounted this bill @ $$18\%$$ p.a. on $$15.11.01$$. On the due date Bonny failed to discharge the bill. Later on Bonny became insolvent and $$50$$ paise in a rupee is recovered from Bombay's estate. How much amount of bad debt will be recorded in the books of Bobby.
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$$12,500$$
0%
$$9,437$$
0%
$$11,687$$
0%
$$13,650$$
Explanation
.
If a bill is drawn on 29th June for 3 months, it will mature on:
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1st October
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2nd October
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3rd October
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None of the above
Explanation
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.
For mutual accommodation of A and B, B accepted a bill drawn on him by A for 2 months Rs. 12,The said bill is discounted at 12% p.a and remitted 1/3rd of the proceeds to B. The amount remitted by A to B will be _________.
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Rs. 4,000
0%
Rs. 3,920
0%
Rs. 3,840
0%
Rs. 3,800
The term 'Negotiable Instrument' is defined in the Negotiable Instruments Act, 1881 under section __________.
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0%
12
0%
13
0%
13(1)
0%
None of the above
Explanation
As per section 13 (1) of Indian Negotiable Act, A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable.
Therefore, C is the correct option.
$$X$$ draws a bill on $$Y$$ for $$Rs. 30,000$$ on $$1.1.X$$ accepts the same on $$4.1.2019$$ for period of $$3$$ months after date. What will be the maturity date of the bill : __________.
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$$4.4.2019$$
0%
$$3.4.2019$$
0%
$$7.4.2019$$
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$$8.4.2019$$
Explanation
$$3$$ months from $$1.1.2019$$ ends on $$31st\ March\ 2019 + 3$$ grace days; hence date of maturity $$3.4.2019$$ (When period of bill is stated in months, calculation will be in months ignoring the days in months).
State whether the following statement is True or False.
The inland bill which is drawn and payable in the same country.
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True
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False
Explanation
Option A is correct one.
A
bill
of exchange that is or on its face purports to be both drawn and payable within the jurisdiction (as country or state) where it is presented
.
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 ___________________.
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After its maturity
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Before its maturity
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At its maturity
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None of the above
Explanation
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.
If an instrument may be constructed either as a promissory note or bill of exchange, it is ________________.
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A valid instrument
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An ambiguous instrument
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A returnable instrument
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None of the above
Explanation
Ambiguous instruments. —Where an instrument may be construed either as a promissory note or bill of exchange, the holder may at his election treat it as either and the instrument shall be thence forward treated accordingly.
Therefore, B is the correct option.
A bills of exchange not covered under negotiable Act. are _______.
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Hundis
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Share dividend warranty
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Promissory note
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Bearer debentures
Explanation
A Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order. Hundis, being a part of the informal system have no legal status and are not covered under the Negotiable Instruments Act, 1881. Though normally regarded as bills of exchange, they were more often used as equivalents of cheques issued by indigenous banker
Hence a is the correct answer.
Following are the persons NOT involved in bill of exchange.
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Maker
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Holder
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Payee
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Drawee
Explanation
Bill of Exchange mainly involves three parties: Drawer/Maker, Drawee and Payee. In most of the cases, the Drawer and Payee are the same person as the Drawer draws the bill in his/her own favor.
Holder refers to a person; we mean the payee of the negotiable instrument, who is in possession of it. He is not involved in bill of exchange.
Hence b is the correct answer.
On $$1.1.2018, X$$ draws a bill on $$Y$$ for $$Rs. 20,000$$ for $$3$$ months maturity date of the bill will be ________.
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$$1.4.2019$$
0%
$$3.4.2019$$
0%
$$4.4.2019$$
0%
$$4.5.2019$$
Every promises and set of promises forming the consideration for each other is an
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Agreement
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Contract
0%
Cross officer
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Acceptance
Explanation
Agreement
is the state or act of agreeing, meaning coming to a mutually approved arrangement.
Every promise and set of Promises forming the consideration for each other is an agreement. Hence, the correct option is A.
On $$16.6.2019\ X$$ draws a bill on $$Y$$ for $$Rs. 25,000$$ for $$30$$ days. $$19th$$ July is a public holiday, maturity date of the bill will be: ________.
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$$19th\ July$$
0%
$$18th\ July$$
0%
$$17th\ July$$
0%
$$16th\ July$$
Explanation
$$30$$ days from $$16.6.2019$$ ends on $$16.7.2019 + 3$$ grace days; hence date of maturity $$19.7.2019$$ but since $$17.7.2019$$ is public holiday due date will be preceding business day $$18.7.2019$$.
A negotiable instrument dated the $$31st\ August, 2019$$, is made payable $$3$$ months after date. The instrument is at maturity on ________.
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$$30th\ August, 2019$$
0%
$$3rd\ December, 2019$$
0%
$$1st\ December, 2019$$
0%
$$31st\ December, 2019$$
Explanation
Here, the cheque is payable after three months and adding the three days grace which makes the maturity date to be 31st August 2019 + 3 months + 3 days i.e.
3rd December 2019
.
Therefore, the Maturity date for the instruments is 3rd December 2019.
A person who is ordered to pay the amount to bill of exchange is known as:
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Drawer
0%
Drawee
0%
Payee
0%
Creditor
$$X$$ draws a bill on $$Y$$ for $$Rs. 2,50,000$$ on $$1.1.2018$$ for $$3$$ months after sight, date of acceptance is $$6.1.2018$$. Maturity date of the bill will be : __________.
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$$8.4.2018$$
0%
$$9.4.2018$$
0%
$$10.4.2018$$
0%
$$11.4.2018$$
Explanation
If bill is drawn using words after sight then calculation will start from the date of acceptance. $$3$$ months from $$6.1.2018$$ comes to $$6.4.2018 + 3$$ grace days; hence date of maturity $$9.4.2018$$.
X sent out 4,000 boxes costing 100 each with the instruction that sales are to be made at cost +45%. X drew a bill on Y for an amount equivalent to 60% of sales value. The amount of bill will be:
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Rs. 3,48,000
0%
Rs. 4,00,000
0%
Rs. 5,80,000
0%
Rs. 2,40,000
Explanation
Cost of goods sold = 4000*100
= 400000
Goods are to be sold at 45%+on cost = 400000 + 45%
= 580000
Hence, the amount of bill will be = 580000*60/100
= 348000
If an instrument be negotiated by means of a forged endorsement, the endorsee acquires no title even though he be a purchaser for value and in good faith, for the endorsement is a nullity.
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True
0%
False
0%
Partly true
0%
None of above
X sold goods to Y for $$ 2,00,000 $$ Y paid cash 50,X will grant 2% discount on balance, and Y requests X to draw a bill for balance, the amount of bill will be:
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2,00,000
0%
1,96,000
0%
1,50,000
0%
1,47,000
Noting is necessary in case of __________ of bill.
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Transfer
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Assignment
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Endorsement
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Dishonour
Explanation
$$\Rightarrow$$ Noting a bill -- When a bill (draft or promissory note) has been presented for acceptance or payment and has been dishonored a note to that effect is indorsed on the bill, after which it may be formally protested.
$$\Rightarrow$$ As per section 99 of the NI Act, 1881, When a promissory note or bill of exchange ha s been dishonoured by non-acceptance or non-payment, the holder may cause such dishonour to be noted by a notary public upon the instrument, or upon a paper attached thereto, or partly upon each.
$$\therefore$$ Noting is necessary in case of Dishonour of bill
If Mr. Z draws the bill of exchange for Rs $$75,000$$ on Mr. N. This transaction will be recorded by Mr.Z in ________and by Mr. N in ________.
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Bills Receivable Book, Bills Payable Book
0%
Bills Payable Book, Bills Receivable Book
0%
Bills Receivable Book, Purchases Book
0%
Bills Payable Book, Sales Book
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Practice Class 10 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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