Tag: elements of book keeping and accountancy

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Questions Related to elements of book keeping and accountancy

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

A draw a bill of exchange on $B$ for $Rs. 3,000$ for $4$ months. He got it discounted with a Bank at $12$% p.a. The discount charged by the bank will be _________.

  1. $Rs. 120$

  2. $Rs. 360$

  3. $Rs. 125$

  4. $Rs. 154$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Discount = Face Value * Rate * Time. Discount = 3,000 * 0.12 * (4/12) = 3,000 * 0.12 * (1/3) = 1,000 * 0.12 = 120.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

R draws a bill of exchange on S for $Rs. 8,000$ for $4$ months. He got it discounted with a Bank at $12$% p.a. The net proceeds to be received from bank will be _______.

  1. $Rs. 7900$

  2. $Rs. 7680$

  3. $Rs. 8000$

  4. $Rs. 7650$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Discount = 8,000 * 0.12 * (4/12) = 320. Net proceeds = Face Value - Discount = 8,000 - 320 = 7,680.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

Bills receivable discounted but not done till the date of final accounts is shown in ___________.

  1. profit & loss account

  2. assets

  3. liabilities

  4. notes to accounts
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A discounted bill is a contingent liability for the drawer until the date of maturity. Since it is not yet matured, it is disclosed as a note to the accounts rather than a direct entry in the balance sheet assets or liabilities.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

A draws an accommodation bill on B. The proceeds are to be shared by A and B in the ratio of 3:1. The amount of bill is Rs. 6,000, discounting charges Rs. 100. Discount borne by A will be ________.

  1. Rs. 75

  2. Rs. 100

  3. Rs. 83

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The discount charges are shared in the ratio of the proceeds. Since the ratio is 3:1, A bears 3/4 of the discount. 100 * (3/4) = 75.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

For mutual accommodation of A and B, B accepted a bill drawn on him by A for 2 months Rs. 12,000. 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 _________.

  1. Rs. 4,000

  2. Rs. 3,920

  3. Rs. 3,840

  4. Rs. 3,800
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Discount = 12,000 * 0.12 * (2/12) = 240. Net proceeds = 12,000 - 240 = 11,760. B's share is 1/3 of the proceeds: 11,760 / 3 = 3,920.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

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.

  1. $12,500$

  2. $9,437$

  3. $11,687$

  4. $13,650$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The bill was for 25,000. When Bonny becomes insolvent, the amount recoverable is 50 percent of the face value. Bad debt = 25,000 * 0.50 = 12,500.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

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?

  1. Rs. 4,000

  2. Rs. 3,867

  3. Rs. 3,000

  4. Rs. 3,010
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A received 5,800 (net). B's share is 1/3 of the proceeds (5,800 / 3 = 1,933.33). However, B is responsible for paying his share of the bill amount (1/3 of 6,000 = 2,000) at maturity. A must remit the difference to B to cover B's portion of the liability. 6,000 * (2/3) = 4,000.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

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.

  1. $24,250$

  2. $25,000$

  3. $16,167$

  4. $32,333$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Discount = 50,000 * 0.12 * (3/12) = 1,500. Net proceeds = 50,000 - 1,500 = 48,500. Since proceeds are shared equally, B receives 48,500 / 2 = 24,250.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

X sold goods to Y for $ 2,00,000 $ Y paid cash 50,000. X will grant 2% discount on balance, and Y requests X to draw a bill for balance, the amount of bill will be:

  1. 2,00,000

  2. 1,96,000

  3. 1,50,000

  4. 1,47,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total amount = 2,00,000. Cash paid = 50,000. Balance = 1,50,000. Discount = 2 percent of 1,50,000 = 3,000. Bill amount = 1,50,000 - 3,000 = 1,47,000.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

Noting is necessary in case of __________ of bill.

  1. Transfer

  2. Assignment

  3. Endorsement

  4. Dishonour
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Noting is a formal process performed by a notary public to provide legal proof that a bill has been dishonored. It is not required for transfer, assignment, or endorsement.