Tag: book keeping and accountancy

Quizzes (126) Questions (1524)

Questions Related to book keeping and accountancy

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

A bill drawn on 25.11.2013 as payable 60 days after date was accepted on 26.11.2013. The date of maturity of this bill will be________.

    1. 1 . 2014
    1. 1. 2014
    1. 1 . 2014

  4. None of these.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The bill is dated 25.11.2013 for 60 days. Adding 60 days: 5 days in Nov (30-25), 31 days in Dec, and 24 days in Jan, totaling 60 days, which lands on 24.01.2014. Adding 3 days of grace gives 27.01.2014.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

The term of a "bill after sight" commences ______.

  1. From the date of acceptance or presentation which ever is earlier.

  2. From the date of drawing a bill.

  3. From the date of receipt of the accepted bill.

  4. From the date of receipt of drawn bill.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option A is correct.

 "Bill after Sight" term of bill starts from the date of acceptance. When no time for payment is mentioned in the bill of exchange and the bill is payable whenever it is presented to the drawee for the payment, such bills are know as "Bill at sight" or "Bill on Demand".

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

When the acceptor of an instrument is also a drawer, notice of dishonour is ________________.

  1. Necessary(section 98A)

  2. Not necessary (Section 98(e))

  3. Not always necessary but under certain circumstances mentioned in section 98A of the Act, it is a must

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under the Negotiable Instruments Act, if the drawer and the acceptor are the same person (or the instrument is otherwise unenforceable against the drawer), notice of dishonor is not required.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

In case of dishonour of a discounted bill, noting charges are initially paid by __________.

  1. drawer.

  2. drawee.

  3. banker.

  4. None of these.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a bill is discounted, the bank holds the instrument. If it is dishonored, the bank pays the notary for the protest and subsequently recovers this cost from the drawer.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

From the following information, find out who can draw the bill if Mr A sold goods to B.

  1. A will draw a bill on B

  2. B will draw a bill on A

  3. None

  4. Third party will draw a bill on A (a)
Reveal answer Fill a bubble to check yourself
A Correct answer
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.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

Dishonour by non-acceptance takes place _________________.

  1. When the bill is properly presented for acceptance, except where presentment is excused, but the drawee makes the default in accepting it.

  2. When the bill is properly presented for acceptance, except where presentment is excused, but the drawee makes the default in paying it.

  3. When the bill is properly presented for payment, except where presentment is excused, but the drawee fails to accept it.

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Dishonour by non-acceptance occurs when a bill is presented for acceptance and the drawee refuses or fails to accept it. Non-payment is distinct from non-acceptance.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

Discount charges of Rs.1,000 on discounting a Bill Receivable accepted by consignee are debited to:

  1. Consignor's Account

  2. Consignee's Account

  3. Consignment Account

  4. Profit & Loss Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Any expense borne by the agent personally, such expenses will not be debited to consignment A/c. Consignor will not make any entry for such expenses. These expenses will be debited to profit and loss account in the books of consignee.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

A bill of 1,50,000 was discounted by A with the banker of 1,45,500. At maturity, the bill returned dishonoured, nothing charges 200. How much amount will the bank deduct from A's bank balance at the time of such dishonour?

  1. 1,45,500

  2. 1,45,700

  3. 1,50,000

  4. 1,50,200
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When a discounted bill is dishonored, the bank deducts the full face value of the bill plus any noting charges incurred from the drawer's account. The discount amount is irrelevant at the time of dishonor.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

X accepted a bill drawn by Y who endorsed the bill to Z. One the due date, the bill is dishonored. To record the dishonor of the bill in the books of Y, Which of the following accounts should be credited?

  1. X

  2. Bills Receivable account.

  3. Z

  4. Bills payable account.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Y (the drawer) endorsed the bill to Z. When dishonored, Y becomes liable to Z. Therefore, Y must credit Z's account to show the liability to the endorsee.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

X draws a bill on Y for 1,50,000 for 3 months on 1.1.13. The bill is discounted with the banker at a charge of  4,500. At maturity the bill return dishonored. In the books of X, for dishonor, the bank account will be credited by:

  1. 1,45,500

  2. 1,50,000

  3. 1,54,500

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Upon dishonor of a discounted bill, the bank reverses the transaction by debiting the drawer's account for the full face value of the bill. The discount charged earlier is a separate expense and does not affect the face value reversal.