Tag: advantages of bill of exchange

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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

Ram draws on Mohan a bill for Rs. 60,000 on April 1,2005, for two months. Mohan accepts the bill and sends it to Ram, who gets the bill discounted for Rs. 58,800. Ram remits Rs. 19,600 to Mohan. On the due date Ram being unable to remit due amount to Mohan, agrees to accept a bill for Rs. 84,000 for two months. This bill is discounted by Mohan, for Rs. 82,200. Mohan remits Rs. 14,800 to Ram. What will be the discount borne by Ram on second bill?

  1. Rs. 1,200

  2. Rs. 1,800

  3. Rs. 1,100

  4. Rs. 800
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The second bill is for 84,000 and discounted for 82,200, so the discount is 1,800. The ratio is 2:1. Ram bears 2/3 of the discount: 1,800 * (2/3) = 1,200.

Multiple choice business maths 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 shopkeeper may sell an article for less than the marked price for some reason. The difference between the marked price and the lowered selling price is called the ________.

  1. Commission

  2. Discount

  3. Selling price

  4. Cost
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

discount

Multiple choice business maths commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

Tarun got $30%$ concession on the labelled price of an article and sold it for $Rs. 8750$ with $25%$ profit on the price he bought. What was the labelled price ?

  1. $Rs. 10,000$

  2. $Rs. 12,000$

  3. $Rs. 16,000$

  4. Data inadequate

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Let the labelled price be $x$ Rs
$\therefore $ Price at which $=x-\dfrac{30}{10}\times x$
he bought $=\left(\dfrac{7x}{10}\right)$ Rs
Also profit is $25\%$
$\therefore  125\% $ of $\dfrac{7x}{10}=8750$ Rs
$\therefore \dfrac{5}{4}\times \dfrac{7x}{10}=8750$ Rs
$\therefore x=\dfrac{8750\times 4\times 10}{5\times 7}$
$\therefore x=10000$ Rs
$\therefore $ Labelled price is $10000$ Rs
Multiple choice business maths 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 businessman marks his goods in such a way that even after allowing $12.5 \%$ discount on a cash purchase he gains $20 \%$. If the cost price is Rs. $140$, the marked price is

  1. Rs. $162$

  2. Rs. $172$

  3. Rs. $193$

  4. Rs. $192$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Business man gains $20\%$ on his cost price, that means, he has sold his goods,
$140 + \dfrac{140\times20}{100} =$ Rs. $168$
Selling price $= 168$

Now, let marked price was Rs. $x$
According to question,
$x - \dfrac{12.5 x}{100} = 168$
$\Rightarrow\dfrac{100x - 12.5 x}{100} = 168$
$\Rightarrow 100x - 12.5 x = 16800$
$\Rightarrow 87.5 x = 16800$
$\Rightarrow x = \dfrac{16800}{87.5}$
$\Rightarrow x = 192$
So, marked price was Rs. $192$

Multiple choice business maths 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 money lender finds that due to reducing the interest rate decrease from $8\%$ to $7\dfrac{3}{4}\%$, his yearly income diminishes by Rs. 61.50. His capital is 

  1. Rs. 22400

  2. Rs. 23800

  3. Rs. 24600

  4. Rs. 26000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Difference in rate$=\left(8-7\dfrac{3}{4}\right)\%=\dfrac{1}{4}\%$
Let the capital be rate Rs.$x$
$\therefore  \dfrac{1}{4}\%$ of $x=61.50$
$\therefore x = 61.50\times 100\times 4$
     Rs$=24600$
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

If a bill is. dishonoured, when presented for payment by third party, the drawer will debit:

  1. Acceptors account

  2. Third partys account

  3. Neither of the two

  4. <span>None of the above</span>
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When a bill is dishonored, the drawer must reverse the credit given to the drawee. Therefore, the drawer debits the acceptor's (drawee's) account to record the debt again.

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 Rs 23000 dishonoured and noting charges paid by Drawer is Rs. 100 than Drawee's A/c will be Debited for Rs. __________.

  1. 23100

  2. 23000

  3. 100

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

Upon dishonor, the drawee is liable for the original bill amount plus the noting charges paid by the drawer. Thus, 23000 + 100 = 23100.

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 noting charges are paid by the bank at the time of the dishonour of the bill, the drawee credits:

  1. Bank account

  2. Noting charges account

  3. Neither (a) nor (b)

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

In the books of the drawee, the bank or the holder is not credited for noting charges; rather, the drawee debits Noting Charges and credits the Drawer's account. Therefore, neither bank nor noting charges account is credited by the drawee.

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

At the time of endorsement of a bill, the drawer credits:

  1. The drawee

  2. The endorsees personal account

  3. Bills receivable account

  4. either (A) or (B)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a bill is endorsed, the drawer transfers the bill to an endorsee. The drawer credits the Bills Receivable account because the asset is leaving their possession.