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CBSE Questions for Class 11 Commerce Accountancy Bill Of Exchange Quiz 1 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Bill Of Exchange
Quiz 1
Which account is debited by a drawee of a bill of exchange on its endorsement?
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0%
Bills Payable
0%
Bills Receivable
0%
Drawer
0%
None of the above
Explanation
The bill of exchange is endorsed by the drawer of the bill. It can never be endorsed by the drawee. Hence, there will not be any journal entry in the books of the drawee.
Therefore, D is the correct option.
When bill is accepted by the acceptor ________.
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0%
Bill Payable A/c Dr
To Drawer A/c
0%
Bill Payable A/c Dr
To Drawee A/c
0%
Bill Receivable A/c Dr
To Drawer A/c
0%
None
Explanation
The following entry will be passed in the books of the drawee:
Bills Payable A/c Dr.
To Drawer A/c
Hence, the correct option is A.
Bills Receivable discounted but not due till the date of final account is shown in:
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0%
P & L A/c
0%
Assets
0%
Liabilities
0%
Footnotes (contingent liabilities)
The person who draws the bill is known as ____________ .
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0%
Drawer
0%
Drawee
0%
Endorser
0%
Endorsee
Rebate on bills discounted is also called_____.
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0%
Unexpired discount
0%
Earned discount
0%
Expired discount
0%
Received discount
Explanation
Rebate on Bills Discounted is also known as Discount
Received in Advance, or, Unexpired
Discount
or,
Discount
Received but not earned. Its treatment is same as we do in the case of Interest Received in Advance.
A bill of exchange is drawn by a ________.
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0%
Creditor
0%
Debtor
0%
Shareholder
0%
Debentureholder
Explanation
Creditors are the suppliers of goods or services. Bill of exchange drawn by creditors is accepted by the business.
A person who draws a bill of exchange is known as the ________.
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0%
drawee
0%
drawer
0%
payer
0%
payee
Explanation
Person who draws a bill of exchange is known as drawer and the person who is accepting the bill is called drawee.
When a loan will be NPA?
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0%
Interest and/ or loan instalments overdue for more than $$90$$ days
0%
Accounts is out of order for more than $$90$$ days in case of overdraft/ cash credit
0%
Bill remains overdue for more than $$90$$ days
0%
All of the above
Explanation
In the case of term loan interest payments, an account will be classified as NPA if the interest applied at specified rates is overdue for more than 90 days.
Hence b is the correct nswer.
A person to whom the bill is endorsed is called _____________.
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0%
Seller
0%
Buyer
0%
Endorsee
0%
Endorser
Explanation
The Process of transferring the bill from one person to other is called Endorsement of the bill.
The Person who transfers the bill is called the Endorser and the person to whom the bill is endorsed is called Endorsee.
Bill of exchange drawn in any Indian language.
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0%
Bills of Exchange
0%
Receipt
0%
Memo
0%
Hundies
Explanation
Bill of exchange in Indian Language is called Hundi.
Although Hundis being a part of informal system they are not covered under negotiable instruments act 1881.
Payment of bill before due date _________________.
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0%
Retirement of bill
0%
Discounting of bill
0%
Honouring of bill
0%
Dishonour of bill
Explanation
When drawee makes the payment of the bill before its due date it is called retirement of the bill.
A person who endorses a bill.
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0%
Endorsee
0%
Endorser
0%
Drawer
0%
Drawee
Explanation
When bill is transferred from one person to another person it is called Endorsement of the Bill .
The Person who Transfers the bill is called Endorser.
Encashment of bill before due date ________________.
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0%
Retirement of bill
0%
Discounting of bill
0%
Honouring of bill
0%
Endorsing of bill
Explanation
When bill is sold to the bank at a discounted rate it is called discounting the bill of exchange.
As cash is received on discounting the bill it is also called encashment.
The true discount on a bill due $$9$$ months hence at $$16$$% per annum is $$Rs. 189$$. The amount of the bill is:
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0%
$$Rs. 1386$$
0%
$$Rs. 1764$$
0%
$$Rs. 1575$$
0%
$$Rs. 2268$$
Explanation
Let P.W. be $$Rs. x$$.
Then, S.I. on $$Rs. x$$ at $$16$$% for $$9$$ months $$= Rs. 189$$.
$$\therefore x\times 16\times \dfrac {9}{12} \times \dfrac {1}{100} = 189$$ or $$x = 1575$$.
$$\therefore P.W. = Rs. 1575$$.
$$\therefore$$ Sum due $$= P.W. + T.D. = Rs. (1575 +189) = Rs. 1764$$.
Rebate is calculated for __________ time before the due date.
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0%
unexpired
0%
expired
0%
future
0%
none
Explanation
Rebate on Bills Discounted is also known as Discount Received in Advance, or, Unexpired Discount or, Discount Received but not earned. Its treatment is same as we do in the case of Interest Received in Advance. It is calculated for unexpired time.
Therefore, A is the correct option.
If the drawee pay the bill before its maturity date it is called ___________.
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0%
retirement
0%
pre-payment
0%
postponement
0%
dishonor
Explanation
When the Drawee pays the bill before its due date, It is termed as the retirement of a bill. It happens with the mutual understanding between the Drawer and the Drawee. To encourage Retiring of the bill, the holder allows some discount called Rebate on the bill amount from the date of retiring the bill to the maturity.
Therefore, A is the correct option.
The party which is ordered to pay the amount is known as __________.
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0%
Payee
0%
Drawer
0%
Drawee
0%
Endorsee
Explanation
The person who draws the bill is
called
the drawer. He gives the order to
pay
money to third
party
.
The party
upon whom the bill is drawn is
called
the
drawee
. He is the person to whom the bill is addressed and who is
ordered to pay
.
A person who endorses the cheque is known as endorser.
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0%
True
0%
False
Explanation
Endorsement means signing on the face or back of a bill for the purpose of transferring the title of the bill to another person. The person who endorses is called the “Endorser”. The person to whom a bill is endorsed is called the “Endorsee”. The endorsee is entitled to collect the money.
Therefore, A is the correct option.
The period intervening between the date on which a bill is drawn and the date on which it becomes due for payment is called
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0%
Due date
0%
Term of Bill
0%
Days of Grace.
0%
Date of Maturity
Explanation
The period intervening between the date on which a bill is drawn and the date on which it becomes due for payment is called Term of Bill. It denotes tenure of the bill i.e time period.
Sum due or face value $$(A)$$ can be calculated by
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0%
$$ A= \dfrac{\text{Banker's Discount} -\text{True Discount}}{\text{Banker's Discount}\times\text{True Discount}} $$
0%
$$ A= \dfrac{\text{Banker's Discount} + \text{True Discount}}{\text{Banker's Discount}-\text{True Discount}} $$
0%
$$ A= \dfrac{\text{Banker's Discount} - \text{True Discount}}{\text{Banker's Discount} + \text{True Discount}} $$
0%
$$ A= \dfrac{\text{Banker's Discount} \times \text{True Discount}}{\text{Banker's Discount}-\text{True Discount}} $$
Explanation
Sum due or face vlue (A) can be calculated by the formula
$$A=\dfrac { Bankers\quad Discount\times True\quad discount }{ Bankers\quad Discount-True\quad discount } $$
The rebate on a bill shows that it has been ____________.
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0%
paid before the date of maturity
0%
paid after the date of maturity
0%
been dishonoured
0%
endorsed
Explanation
A rebate is a payment back to a buyer of a portion of the full purchase price of a good or service. This payment is typically triggered by the cumulative amount of purchases made within a certain period of time. Rebates are generally designed to increase the volume of purchases made by customers.
Therefore, A is the correct option.
To whom of the following, payment of the amount due on a promissory note, bill of exchange or cheque must be made in order to discharge the maker or accept or ________________.
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0%
Holder of the instrument
0%
Indorser of the instrument
0%
Indorsee of the instrument
0%
None of the above
Explanation
The payment of the amount due on a promissory note, bill of exchange, or cheque must be made in order to discharge the maker or acceptor or holder of the instrument. Hence, the correct option is A.
On 1.3.2006 X draws a bill on Y for 3 months for Rs20,On 4.5.2006, Y pays the bill to X at 12% discount. The amount of discount will be __________.
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0%
Rs. 200
0%
Rs. 400
0%
Rs. 600
0%
Rs. 100
Explanation
Amount of discount = Rs. 20000 x (12/100) x (1/12)
= Rs. 200
Therefore, A is the correct option.
Which of the following statements is true?
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0%
Creditors can draw a bill on debtors
0%
Debtors can draw a bill on creditors
0%
Bank will draw a bill on customer at the time of overdraft
0%
One can draw the bill on another under any circumstance.
Explanation
A bill of exchange is generally drawn by the creditor upon his debtor. It has accepted by the drawee (debtor) or someone on his behalf. A seller/creditor who is entitled to receive money from the debtor can draw a bill of exchange upon the buyer/debtor.
Therefore, A is the correct option.
Goods of the invoice value Rs. 2,40,000 sent out to consignee at 20% profit oncost. The loading amount will be:
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0%
Rs. 40,000
0%
Rs. 48,000
0%
Rs.50,000
0%
None
Explanation
.
At the time of renewal of a bill, interest account is in the books of the drawer.
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0%
Credited
0%
Debited
0%
None of these
0%
Both (a) and (b)
Everything mentioned below is required to make the endorsement complete EXCEPT:
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0%
The holder signs on the face or back of the instrument
0%
The instrument is delivered to the endorsee
0%
It is sighed and delivered with intention of vesting of the endorsee with the rights of the holder
0%
It is sighed and delivered with intention of vesting the endorsee with the duties of the holder
If a bill is drawn on 28th January 1996 for 1 month, it will mature on _______________.
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0%
1st March 1996
0%
2nd March 1996
0%
3rd March 1996
0%
31st March 1996
Explanation
Date of maturity of the bill = 28th January 1996 + 1 month + 3 days grace = 2nd March 1996. Hence, the correct option is B.
At the time of endorsement of a bill, the drawer credits:
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0%
The drawee
0%
The endorsees personal account
0%
Bills receivable account
0%
either (A) or (B)
Explanation
Journal Entry for the endorsement of a bill
Endorsee A/c Dr. XXX
To Bills Receivable A/c XXX
(Being bill is endorsed)
Therefore, C is the correct option.
In case a cheque is dishonored than a drawer is liable to a punishment of
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0%
$$2$$ years imprisonment
0%
The case is decided as per court
0%
Fine which may exceed to twice the amount of the cheque
0%
Both a & c
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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