Tag: meaning of bill of exchange

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Questions Related to meaning of bill of exchange

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Bills receivable account is _____________.

  1. an expense account

  2. an assets account

  3. a liability account

  4. a revenue account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A Bills Receivable is a written promise to receive money, which constitutes a current asset for the holder. Therefore, it is classified as an asset account.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Bill Payable is _________.

  1. Real A/c

  2. Personal A/c

  3. Nominal A/c

  4. Suspense A/c
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The accounts which are related to individuals, persons and firms are called personal accounts. Personal accounts are further classified into Natural Personal account, Artificial Personal Account and Representative Personal account. Bills Payable represents creditors for purchases. And every creditor is a person whether artificial or personal. Therefore, bills payable is a personal account.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

The hundi payable at sight is called Darshani hundi.

  1. True

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

 A hundi payable at sight is called darshani hundi. It is negotiable and is like a demand bill. It may be sold at par or at premium or at discount. A darshani hundi should be presented for payment within a reasonable time of its receipt by the holder.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

____________ is designed as a summary of information regarding a duly accepted bill received by drawer.

  1. Bill Receivable Book

  2. Bill Payable Book

  3. Cash Book

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

The Bills Receivable Book is the primary subsidiary book used to record the details of all bills received from debtors.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

________________ account representing the liability of the acceptor in respect of bills accepted by him and will always show a credit balance.

  1. creditor

  2. Bill Payable

  3. Loan

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

Bills Payable represents a liability for the acceptor, as they are obligated to pay the amount upon maturity. Liabilities naturally carry a credit balance.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

A bill given to a creditor is called bill payable.

  1. True

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

A bill payable is a document which shows the amount owed for goods or services received on credit (meaning not paid at the time that the goods or services were received).

Hence, a bill payable is also known as an unpaid vendor invoice.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Sale of Return Account in the Sale or Return Ledger represents the value of goods still lying with the customers for approval.

  1. True

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

In 'sale or return' accounting, the Sale or Return Ledger tracks goods sent to customers that have not yet been accepted or returned, representing inventory still owned by the seller.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Which one of the following documents attests the fact that goods of specified quantity, value and description are entering the bounds of the country.

  1. Bill of Lading

  2. Consular invoice

  3. Documentary bill

  4. Bill of entry
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A Bill of Entry is a legal document filed by an importer to declare the goods being imported, including their quantity, value, and description, for customs clearance.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Bills receivable account is a __________.

  1. nominal account

  2. personal account

  3. real account

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

While Bills Receivable is a personal account (representing the debtor), it is often categorized as a real account in some traditional accounting classifications because it represents a tangible legal document/asset.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Bills payable book is a ____________.

  1. subsidiary book

  2. principal book

  3. ledger

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

There are various subsidiary books which are used to record the specific transaction pertaining to the specific activity. 

Credit sales are recorded in sales book while bills payable are recorded in bills payable book which is a subsidiary book.