Tag: promissory note

Quizzes (0) Questions (48)

Questions Related to promissory note

Multiple choice accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

________  of the Negotiable Instrument Act, 1881 defines, ''A cheque is a bill of exchange drawn on a specified banker and not expressed to be payble otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.''

  1. Section 8

  2. Section 6

  3. Section 5

  4. Section 10
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to Section 6, of the Negotiable Instruments Act, 1881, the term cheque is defined as “a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.”

Multiple choice accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

The Negotiable Instruments Act, 1881 has recognised an _____________ also as a cheque.

  1. virtual cheque

  2. accommodation bill

  3. bearer cheque

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

The Negotiable Instruments (Amendment) Act, 2002, introduced the concept of an electronic cheque, which is a cheque drawn in electronic form.

Multiple choice accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

 A cheque does not include the electronic image of a truncated cheque and a cheque in the electronic form.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Section 6 of the Negotiable Instruments Act explicitly includes electronic images of truncated cheques and cheques in electronic form within the definition of a cheque.

Multiple choice accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

Cheque is as _______________.

  1. Promissory note

  2. Bill of exchange

  3. Both a and b above

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

A cheque is a specific type of bill of exchange drawn on a specified banker and is always payable on demand. It is not a promissory note, which is an unconditional promise to pay.

Multiple choice accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

If the words "not negotiable' are used with special crossing in a cheque, the cheque is _______________.

  1. Not transferable

  2. Transferable

  3. Negotiable under certain circumstances

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

The words 'not negotiable' on a crossed cheque do not restrict the transferability of the cheque; they merely prevent the holder from having a better title than the transferor. Therefore, the cheque remains transferable.

Multiple choice accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

A Promissory Note or Bill of Exchange can be made payable ___________.

  1. On demand

  2. On a specified date

  3. After a specified period - months or days

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Promissory notes and bills of exchange can be drawn payable on demand, on a specific future date, or after a certain period of time (usance).