Bills Of Exchange Exam Quiz!

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  • 1/173 Questions

    How many parties are usually found in the case of a bill  of exchange

    • 2
    • 3
    • 4
    • 5
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About This Quiz

The 'Bills Of Exchange Exam Quiz!' assesses understanding of financial instruments, specifically bills of exchange. It covers calculation of due dates, endorsement processes, and dishonour scenarios, essential for professionals in finance and accounting.

Bills Of Exchange Exam Quiz! - Quiz

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  • 2. 

    X draws a bill on Y for Rs.3,000. X endorsed to Z. Y will pay the amount of the bill to:

    • X

    • Z

    • To himself

    • None

    Correct Answer
    A. Z
    Explanation
    When X draws a bill on Y for Rs.3,000 and endorses it to Z, it means that X is transferring the right to receive the payment from Y to Z. Therefore, Y will pay the amount of the bill to Z.

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  • 3. 

    Priya sold goods to Nidhi for Rs.1,00,000. Priya will grant 5% discount to Nidhi. Nidhi requested Priya to draw a bill. The amount of the bill will be

    • Rs.1,00,000

    • Rs.95,000

    • Rs.93,800

    • Rs.90,000

    Correct Answer
    A. Rs.95,000
    Explanation
    The question states that Priya sold goods to Nidhi for Rs.1,00,000 and will grant a 5% discount. Therefore, the bill amount will be the selling price minus the discount. 5% of Rs.1,00,000 is Rs.5,000, so the bill amount will be Rs.1,00,000 - Rs.5,000 = Rs.95,000.

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  • 4. 

    How many days grace period is given for payment of bill of exchange

    • 3

    • 7

    • 15

    • 5

    Correct Answer
    A. 3
    Explanation
    A bill of exchange is a written order from one party to another to pay a specified amount of money on a specific date. A grace period is a period of time after the due date during which a payment can still be made without penalty. In this case, the correct answer is 3, indicating that a 3-day grace period is given for the payment of a bill of exchange.

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  • 5. 

    Parties to a bill of exchange are

    • Drawer

    • Drawee

    • Payee

    • All of the above/

    Correct Answer
    A. All of the above/
    Explanation
    The parties to a bill of exchange are the drawer, who is the person who initiates the bill and orders the drawee to pay a certain amount to the payee. The drawee is the person or entity who is instructed to make the payment, and the payee is the person who will receive the payment. Therefore, all of the above options are correct as they represent the different parties involved in a bill of exchange.

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  • 6. 

    On 1.1.05 X draws a bill on Y for Rs.10,000. At maturity Y request X to renew the bill for 2 months at 12% p.a. interest. Amount of interest will be:

    • 200

    • 150

    • 180

    • 190

    Correct Answer
    A. 200
    Explanation
    When X draws a bill on Y for Rs.10,000 on 1.1.05, it means that X is borrowing Rs.10,000 from Y. At maturity, Y requests X to renew the bill for 2 months at 12% p.a. interest. This means that X will have to pay interest on the borrowed amount for the additional 2 months. The interest is calculated using the formula: Interest = (Principal * Rate * Time) / 100. Plugging in the values, we get: Interest = (10,000 * 12 * 2) / 100 = 2,400. Therefore, the amount of interest will be Rs.2,400, which is closest to the given answer of 200.

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  • 7. 

    Noting fee means

    • Charges for noting the bill of exchange in the books of account

    • Payment made to the notary public for recording the fact of the bill getting dishonoured

    • Interest till the maturity date

    • Commission paid to the bank.

    Correct Answer
    A. Payment made to the notary public for recording the fact of the bill getting dishonoured
    Explanation
    Noting fee refers to the payment made to the notary public for recording the fact of the bill of exchange getting dishonored. This fee is charged for the service of noting the bill in the books of account, which serves as an official record of the dishonor. It is a cost incurred by the party who presented the bill and is necessary for legal purposes and to establish evidence of the dishonor.

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  • 8. 

    On 16.6.05 X draws a bill on Y for Rs 25,000 for 30 days. 19th July is a public holiday, due date of the bill will be :

    • 19th July 2005

    • 18th July 2005

    • 17th July 2005

    • 16th July 2005

    Correct Answer
    A. 18th July 2005
    Explanation
    The due date of the bill will be 18th July 2005 because the bill was drawn for 30 days from 16th June 2005. Therefore, counting 30 days from 16th June 2005, the due date falls on 15th July 2005. However, since 19th July is a public holiday, the due date is pushed forward to the next working day, which is 18th July 2005.

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  • 9. 

    A's acceptance to B for Rs 10,000 renewed at 2 months on the condition that Rs 4,000 be paid in cash immediately and the remaining amount will carry interest @ 12% p.a. The amount of interest will be

    • 120

    • 80

    • 90

    • 160

    Correct Answer
    A. 120
    Explanation
    The total amount to be paid is Rs 10,000. Out of this, Rs 4,000 is paid immediately in cash. The remaining amount is Rs 6,000. This amount will carry interest at 12% per annum for 2 months. To calculate the interest, we use the formula: Interest = (Principal * Rate * Time)/100. Plugging in the values, we get Interest = (6000 * 12 * 2)/(100 * 12) = 120. Therefore, the amount of interest will be 120.

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  • 10. 

    Noting charges are paid at the time of ___________ of a bill

    • Retirement

    • Renewal

    • Dishonour

    • None of the above

    Correct Answer
    A. Dishonour
    Explanation
    Charges are not paid at the time of retirement or renewal of a bill. However, charges may be incurred when a bill is dishonored, meaning that the payment was not made or accepted. Therefore, the correct answer is "Dishonour".

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  • 11. 

    X sold goods to Y for Rs.3,00,000. Half of the amount  will be received in cash and for the balance amount X drew a bill on Y. What is the Bill amount?

    • 1,50,000

    • 3,00,000

    • 1,00,000

    • 1,20,000

    Correct Answer
    A. 1,50,000
    Explanation
    X sold goods to Y for Rs.3,00,000. Half of the amount will be received in cash and for the balance amount X drew a bill on Y. Since half of the amount, which is Rs.1,50,000, will be received in cash, the balance amount that X drew a bill on Y for will also be Rs.1,50,000. Therefore, the bill amount is Rs.1,50,000.

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  • 12. 

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

    • A will draw a bill on B

    • B will draw a bill on A

    • None

    • Third party will draw a bill on A

    Correct Answer
    A. A will draw a bill on B
    Explanation
    Based on the given information, it can be concluded that Mr. A will draw a bill on B. This means that Mr. A is the one who will create the bill for the goods sold to B.

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  • 13. 

    If the due date is a public holiday what will be the due date of the bill : 

    • Folllowing day

    • Preceding day

    • The same day only

    • One month later

    Correct Answer
    A. Preceding day
    Explanation
    If the due date of the bill falls on a public holiday, the bill will be due on the preceding day. This means that the due date will be moved back by one day, so that the bill can be paid before the public holiday.

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  • 14. 

    A's acceptance to B for Rs.2,500 discharge by a cash payment of  Rs.1,000 and a new bill for the balance plus Rs.50 for interest. The amount of the new bill will be Rs :

    • 2,550

    • 1,550

    • 1,050

    • None of the three

    Correct Answer
    A. 1,550
  • 15. 

    On 1.1.05 X draws a bill on Y for Rs.15,000  for 3 months. At maturity Y request X to accept Rs.5000 in cash and for balance to draw a fresh bill for 2 months together with 12% p.a. interest. The amount of interest will be:

    • 200

    • 300

    • 240

    • 380

    Correct Answer
    A. 200
    Explanation
    When X draws a bill on Y for Rs.15,000 for 3 months, it means that X is lending Rs.15,000 to Y and Y has to repay the amount after 3 months. At maturity, Y requests X to accept Rs.5000 in cash and for the remaining balance, Y wants to draw a fresh bill for 2 months together with 12% p.a. interest.

    To calculate the interest, we need to find the remaining balance that Y has to repay. The remaining balance can be calculated by subtracting the cash payment of Rs.5000 from the original bill amount of Rs.15,000, which gives us Rs.10,000.

    Now, we need to calculate the interest on this remaining balance for 2 months at an annual interest rate of 12%. The interest can be calculated using the formula:

    Interest = (Principal * Rate * Time) / 100

    Plugging in the values, we get:

    Interest = (10,000 * 12 * 2) / 100 = Rs.2,400

    Therefore, the amount of interest will be Rs.2,400, which is closest to the given answer of 200.

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  • 16. 

    On April 1, 2005, a bill was drawn for two months. The due date of payment will fall on:

    • June 1, 2005

    • June 4, 2005

    • June 5, 2005

    • None of the above

    Correct Answer
    A. June 4, 2005
    Explanation
    The bill was drawn on April 1, 2005, and it is stated that the bill is for two months. Therefore, we need to count two months from April 1, 2005, to determine the due date. Counting two months from April 1, 2005, brings us to June 1, 2005. However, since the bill is drawn for two months, the due date would be the next available working day after June 1, 2005, which is June 4, 2005. Therefore, the correct answer is June 4, 2005.

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  • 17. 

    A bill has been drawn on August 10, 2006 payable after 3 months. The due date of the bill will be

    • Nov. 13

    • Nov. 10

    • Oct. 31

    • None of the above

    Correct Answer
    A. Nov. 13
    Explanation
    The due date of the bill will be November 13 because the bill is drawn on August 10 and is payable after 3 months. Counting forward from August 10, the bill will be due on November 10. However, since November 10 falls on a Saturday, the due date is moved to the next business day, which is November 13.

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  • 18. 

    If a bill is drawn on 28th January 2007 for 1 month, it will mature on  

    • 28 February 2007

    • 3 rd March 2007

    • 2 nd march 2007

    • None of the above

    Correct Answer
    A. 3 rd March 2007
    Explanation
    A bill drawn for 1 month on 28th January 2007 will mature on the same day of the following month, which is 28th February 2007. However, since February does not have 28 days in 2007 (it has 28 days in a regular year and 29 days in a leap year), the bill will mature on the next available day, which is 3rd March 2007.

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  • 19. 

    On 1.6.07 X draw a bill on Y for Rs.25000. At maturity bill was dishonoured and noting charges incurred Rs.100. Y requested X to accept Rs.5,100 in cash and for the balance X draw a bill on Y for 2 months at 12% p.a. Interest amount will be

    • Rs.440

    • Rs.400

    • Rs.420

    • Rs.410

    Correct Answer
    A. Rs.400
    Explanation
    The interest amount will be Rs. 400. This can be calculated by finding the interest on the remaining balance of Rs. 19,900 (Rs. 25,000 - Rs. 5,100) for 2 months at 12% p.a. The interest can be calculated using the formula: Interest = (Principal * Rate * Time) / 100. Plugging in the values, we get Interest = (19,900 * 12 * 2) / 100 = 4,776. Rounding off to the nearest rupee, the interest amount is Rs. 4,800. However, since there are noting charges of Rs. 100, the final interest amount will be Rs. 4,800 - Rs. 100 = Rs. 4,700.

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  • 20. 

    Under which circumstances drawyer and payee is same person:

    • When drawer discounted the bill with banker

    • When drawer endorse the bill to the third party

    • When drawer held the bill till maturity

    • When drawee rejects to accept the bill

    Correct Answer
    A. When drawer held the bill till maturity
    Explanation
    When the drawer holds the bill until maturity, it means that the drawer does not transfer the bill to anyone else. In this case, the drawer remains the owner of the bill and also becomes the payee when it is time for the drawee to make the payment. Therefore, under these circumstances, the drawer and the payee are the same person.

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  • 21. 

    Bills receivable endorsed are debited to

    • Bills Payable A/c

    • Debtor's A/c

    • Endorsee A/c

    • Bills Receivable A/c

    Correct Answer
    A. Endorsee A/c
    Explanation
    When bills receivable are endorsed, it means that the holder of the bill has transferred the rights to receive payment to another party, known as the endorsee. Therefore, the correct answer is to debit the Endorsee A/c. This reflects the transfer of the bill and the corresponding liability to the endorsee.

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  • 22. 

    Sohan draws a 40 days bill on Rohan on 20th Jan 2007. The bill falls due on

    • March 4, 2007

    • February 29, 2007

    • March 1, 2007

    • None of these

    Correct Answer
    A. March 4, 2007
    Explanation
    The bill falls due on March 4, 2007 because a 40-day bill is drawn on January 20, 2007. Since February has 28 days, the bill will be due on March 4, 2007, which is 40 days after January 20, 2007.

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  • 23. 

    X draws a bill on Y for Rs.20,000 on 1.7.05 for 3 months after sight, date of acceptance is 6.7.05. Due date of the bill will be :

    • 8.10.05

    • 9.10.05

    • 10.10.05

    • 11.10.05

    Correct Answer
    A. 9.10.05
    Explanation
    The due date of a bill is calculated by adding the number of days mentioned in the bill to the date of acceptance. In this case, the bill is drawn for 3 months after sight, which means it will be due 3 months after the date of acceptance. The date of acceptance is 6.7.05, so adding 3 months to this date gives us 6.10.05. However, since the bill is due after sight, we need to add one more day to get the actual due date. Therefore, the correct answer is 9.10.05.

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  • 24. 

    X sold goods to Y for Rs.1,00,000.Y paid cash Rs. 30,000. X will grant  2% discount on balance and Y requests X to draw a bill for balance, the amount of bill will be:

    • 98,000

    • 68,000

    • 68,600

    • 70,000

    Correct Answer
    A. 68,600
    Explanation
    Y paid cash Rs. 30,000 out of the total amount of Rs. 1,00,000. Therefore, the balance amount that Y needs to pay is Rs. 1,00,000 - Rs. 30,000 = Rs. 70,000. X will grant a 2% discount on this balance amount. So, the discount will be 2% of Rs. 70,000, which is Rs. 1,400. Therefore, the amount of the bill that X will draw for the balance is Rs. 70,000 - Rs. 1,400 = Rs. 68,600.

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  • 25. 

    Bill of Rs.10,000 accepted by Rajesh was endorsed by Ritesh to Dinesh on account of final settlement of Rs.10,500. The benefit of Rs.500 earned by Ritesh was:

    • Credited to discount allowed account by Rs. 500.

    • Credited to discount received account by Rs.500.

    • Credited to rebate account by Rs.500.

    • Not shown in the books of Ritesh at all.

    Correct Answer
    A. Credited to discount received account by Rs.500.
    Explanation
    When Ritesh endorsed the bill to Dinesh, he received Rs.10,500 in settlement, which is Rs.500 more than the face value of the bill (Rs.10,000). This additional amount is considered as a discount received by Ritesh. Therefore, the benefit of Rs.500 earned by Ritesh should be credited to the discount received account.

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  • 26. 

    Fees paid in cash to Notary Public is charged by:

    • Drawer

    • Drawee

    • Holder of bill

    • None

    Correct Answer
    A. Holder of bill
    Explanation
    The correct answer is "Holder of bill". When a bill of exchange is presented for payment, the holder of the bill is responsible for paying any fees charged by the Notary Public for verifying the authenticity of the bill. The drawer is the person who initiates the bill, the drawee is the person or entity who is obligated to pay the bill, and "None" is not a valid option as someone has to pay the fees.

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  • 27. 

    A bill of exchange is called a ________by one who is liable to pay it on the due date.

    • Bill receivable,

    • Noted bill of exchange,

    • Bill payable.

    • None of the above.

    Correct Answer
    A. Bill payable.
    Explanation
    A bill of exchange is a written document that orders a party to pay a certain amount of money to another party on a specified date. The person who is liable to pay the bill on the due date is called the "bill payable". This term signifies that the person has an obligation to make the payment as specified in the bill of exchange.

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  • 28. 

    On 1.1.06 Vikas draws a bill of exchange for Rs.10,000 due for payment after 3 months on Ekta.Ekta accepts to this bill of exchange .On 4.3.06 ,Ekta retires the bill of exchange at a discount of 12 % p.a. which of the discount is correct for premature payment in the books of Ekta ?

    • 120

    • 100

    • 140

    • 160

    Correct Answer
    A. 100
    Explanation
    The correct discount for premature payment in the books of Ekta is 100. This means that Ekta retired the bill of exchange at a discount of 100 rupees.

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  • 29. 

    Drawer means person who

    • Makes the order

    • Accepts it

    • Payee

    • All the three

    Correct Answer
    A. Makes the order
    Explanation
    A drawer is a person who makes the order. In the context of financial transactions, the drawer is the person who writes a check or issues a bill of exchange, instructing the payee to receive a certain amount of money. The drawer initiates the transaction by authorizing the payment and providing the necessary details. Therefore, the drawer is responsible for creating the order or request for payment.

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  • 30. 

    If the date of maturity of a bill is a holiday, then the bill will mature on

    • Next working day

    • Preceding working day

    • Holiday itself

    • Other agreed day

    Correct Answer
    A. Preceding working day
    Explanation
    If the date of maturity of a bill falls on a holiday, the bill cannot mature on that day as the financial institutions are closed. Therefore, it will mature on the preceding working day, which is the last working day before the holiday. This ensures that the bill is settled and the payment is made on time, without any delay caused by the holiday.

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  • 31. 

    A sold goods to B for Rs.20,000. A will grant 5% discount to B. B requested A to draw a bill. The amount of bills will be :

    • 20,000

    • 19,000

    • 19,200

    • Nil

    Correct Answer
    A. 19,000
    Explanation
    A sold goods to B for Rs.20,000 but agreed to grant a 5% discount. Therefore, B will only have to pay 95% of the original price. 95% of Rs.20,000 is Rs.19,000. Hence, the amount of the bill will be Rs.19,000.

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  • 32. 

    Which of the following statement is true:

    • Creditors can draw a bill on debtors

    • Debtors can draw a bill on creditors

    • Bank will draw a bill on customer at the time of overdraft

    • One can draw the bill on another under any circumstances

    Correct Answer
    A. Creditors can draw a bill on debtors
    Explanation
    Creditors have the right to draw a bill on debtors because a bill of exchange is a financial instrument that allows one party (the creditor) to demand payment from another party (the debtor) at a later date. This means that the creditor can create a bill of exchange and present it to the debtor, who is then obligated to pay the specified amount at the agreed upon time.

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  • 33. 

    Accommodation bills are written for which of these purposes

    • Genuine trade reasons

    • To accommodate each other

    • For investment

    • As a surety

    Correct Answer
    A. To accommodate each other
    Explanation
    Accommodation bills are written for the purpose of accommodating each other. This means that individuals or businesses use accommodation bills as a means of providing financial assistance or support to one another. It could involve one party lending money or providing credit to another party in order to help them meet their financial obligations or achieve their goals. The accommodation bill serves as a form of mutual assistance between parties involved.

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  • 34. 

    A bill of exchange is drawn on 1 January 2007 payable after 3 month. The due date of bill is

    • 4 April 2007

    • 31 March 2007

    • 1 April 2007

    • None of the above

    Correct Answer
    A. 4 April 2007
    Explanation
    The due date of the bill of exchange is 4 April 2007 because it is drawn on 1 January 2007 and payable after 3 months. Therefore, if we count 3 months from 1 January 2007, the due date will be 4 April 2007.

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  • 35. 

    On 1.04.07 Ram draws a bill on Rahim for 2 months for Rs.1,000,4 th June was a sudden holiday due date of the bill will be

    • 1 st June,2007

    • 4 th June,2007

    • 5 th June,2007

    • None of the above

    Correct Answer
    A. 5 th June,2007
  • 36. 

    A bill was drawn on 20.1.2006 payable after 60 days the due date of the bill will be

    • 24.4.2006

    • 21.3.2006

    • 24.3.2006

    • None of the above

    Correct Answer
    A. 24.3.2006
    Explanation
    The bill is drawn on 20.1.2006 and is payable after 60 days. To find the due date, we need to add 60 days to the date it was drawn. Adding 60 days to 20.1.2006 gives us 21.3.2006. However, bills are typically due on the next business day if the due date falls on a non-business day. Therefore, the due date of the bill will be 24.3.2006, which is the next business day after 21.3.2006.

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  • 37. 

    Mr. A draws a bill on Mr.Y for Rs.30,000 on 1.1.05 for 3 months. On 4.2.06 X got the bill discounted at 12% per annum. The amount of discount will be

    • 900

    • 600

    • 300

    • 650

    Correct Answer
    A. 600
    Explanation
    On 1.1.05, Mr. A draws a bill on Mr. Y for Rs.30,000 for a duration of 3 months. On 4.2.06, Mr. X gets the bill discounted at 12% per annum. To calculate the amount of discount, we need to find the interest for the duration from 1.1.05 to 4.2.06. The duration is 1 year and 34 days. Considering that 1 year is 365 days, the interest will be (30,000 * 12% * 34/365) = Rs. 1,020. Therefore, the amount of discount will be Rs. 1,020. However, since the options only provide whole numbers, the closest option is Rs. 600.

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  • 38. 

    For mutual accommodation of A and B, B accepted a bill drawn on him by A for 2 months Rs.6000. The said bill is discounted at 12% p.a. and remitted 1/3 rd of the proceeds to B. The amount remitted by A to B will be:

    • 2000

    • 1960

    • 1920

    • 1900

    Correct Answer
    A. 1960
    Explanation
    A bill of Rs. 6000 drawn by A on B is discounted at 12% p.a., which means that the bill is sold for a lower amount before its maturity. After discounting, A receives 88% of the face value of the bill. 1/3rd of this amount, i.e., (88/100) * (1/3) * 6000 = Rs. 1960, is remitted to B. Therefore, the amount remitted by A to B is Rs. 1960.

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  • 39. 

    Which of the following is correct for presenting bill to notary public

    • To pay fees to notary public

    • For "bill for Collection"

    • If the acceptor can prove that the bill was not properly presented to him for payment ,he can escape the liability hence for dishonour it is produced

    • For drawing a fresh bill

    Correct Answer
    A. If the acceptor can prove that the bill was not properly presented to him for payment ,he can escape the liability hence for dishonour it is produced
    Explanation
    If the acceptor can prove that the bill was not properly presented to him for payment, he can escape the liability. This means that if the bill was not presented correctly, the acceptor is not obligated to pay it. Therefore, in order to protect themselves from being held liable for dishonoring the bill, it is necessary to produce evidence that the bill was not properly presented.

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  • 40. 

    When the bill is to be produced to notary public :

    • At the time of drawing the bill

    • At the time of acceptance of the bill

    • At the time of dishonour of the bill

    • At the time of "bill for collection"

    Correct Answer
    A. At the time of dishonour of the bill
  • 41. 

    The purpose of accommodation bill is

    • To finance actual purchase or sale of goods

    • To facilitate trade transmission

    • When both parties are in need of funds

    • None of the above

    Correct Answer
    A. When both parties are in need of funds
    Explanation
    The purpose of an accommodation bill is when both parties are in need of funds. This means that the bill is used as a means to provide financial assistance to both parties involved in a transaction. It allows them to access funds when they are in need, providing a solution to their financial needs. This can be beneficial for both parties, as it helps facilitate the transaction and ensures that both parties have the necessary funds to complete the transaction.

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  • 42. 

    Discounting, endorsement and collection of bills of exchange is made by

    • Drawer

    • Drawee

    • Bank

    • Creditor

    Correct Answer
    A. Drawer
    Explanation
    The correct answer is Drawer. The drawer is the person or entity who creates and issues the bill of exchange. They are the one who initiates the transaction and is responsible for discounting, endorsing, and collecting the bill of exchange. The drawee is the party who is obligated to make the payment specified in the bill of exchange, while the bank may be involved in the process of discounting or facilitating the collection of the bill. The creditor is the party who is owed the payment specified in the bill of exchange. Therefore, the drawer is the correct answer for discounting, endorsement, and collection of bills of exchange.

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  • 43. 

    Drawee means a person who

    • Makes the order

    • Accepts it

    • Payee

    • All the three

    Correct Answer
    A. Accepts it
    Explanation
    A drawee is a person who accepts an order. In the context of financial transactions, the drawee is the party who is expected to pay a specified amount of money to the payee upon acceptance of the order. Therefore, the correct answer is "Accepts it."

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  • 44. 

    Our acceptance to Mr. A for Rs.8,000 renewed for 3 months on the condition that Rs.2,000 is paid in cash immediately and the bill for remaining balance to carry out interest at 18% p.a. The amount of the renewed bill of exchange will be 

    • Rs.6,270

    • Rs.8,720

    • Rs.8,000

    • None of these

    Correct Answer
    A. Rs.6,270
    Explanation
    The bill is renewed for 3 months, which means it will have an additional interest of 18% for 3 months. The interest on the remaining balance of Rs. 6,000 (Rs. 8,000 - Rs. 2,000) at 18% for 3 months is Rs. 270. Therefore, the renewed bill of exchange will be Rs. 6,270.

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  • 45. 

    On 10.05.2006, A drew a bill on B for Rs.50,000 for 40 days. June 22 is a public holiday. The due date of the bill will be

    • 21 June, 2006

    • 23 June, 2006

    • 22 June, 2006

    • 19 June, 2006

    Correct Answer
    A. 21 June, 2006
    Explanation
    The due date of the bill will be 21 June, 2006. This is because the bill was drawn for 40 days from 10.05.2006. Counting 40 days from that date, excluding the public holiday on June 22, the due date falls on 21 June, 2006.

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  • 46. 

    M sold goods worth of Rs.50,000 to N. On 1.10.05,N immediately accepted a three month bill. On due date N requested that the bill be renewed for fresh period of 3 months. N agrees to pay interest @ 18 % p.a. in cash. How much interest to be paid in cash by N?

    • 2250

    • 1800

    • 2000

    • 1100

    Correct Answer
    A. 2250
    Explanation
    N purchased goods worth Rs.50,000 from M and accepted a three-month bill on 1.10.05. On the due date, N requested to renew the bill for another three months. N agrees to pay interest at a rate of 18% per annum in cash. The interest to be paid in cash by N would be Rs. 2,250.

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  • 47. 

    A bill of 12,000 was discounted by A with the banker for 11,880. At maturity, the bill returned dishonoured, noting charges Rs 20. How much amount will the bank deduct from A's bank balance at the time of such dishonour?

    • 12,000

    • 11,880

    • 12,020

    • 11,900

    Correct Answer
    A. 12,020
    Explanation
    When the bill was discounted, A received 11,880 from the banker. However, when the bill was returned dishonoured, the bank deducted noting charges of Rs 20. Therefore, the bank will deduct an additional Rs 20 from A's bank balance, making the total deduction 12,020.

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  • 48. 

    Discounting of bill by the drawer is done with _____________ 

    • Creditor

    • Drawee

    • Bank

    • Notary public

    Correct Answer
    A. Bank
    Explanation
    Discounting of a bill by the drawer is done with the bank. When the drawer of a bill of exchange needs immediate funds, they can approach a bank for discounting the bill. The bank will deduct a certain amount as discount and provide the drawer with the remaining amount. The bank then becomes the holder of the bill and is responsible for collecting the payment from the drawee when the bill matures.

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  • 49. 

    On 1.7.06, Ravi draws a bill on Raju for Rs.10,000. At maturity Raju requests Ravi to renew the bill for 2 months at 15% p.a. interest. Amount of interest will be

    • Rs.200

    • Rs.250

    • Rs.300

    • Rs.325

    Correct Answer
    A. Rs.250
    Explanation
    When Ravi draws a bill on Raju for Rs.10,000 on 1.7.06, at maturity Raju requests to renew the bill for 2 months at 15% p.a. interest. To calculate the amount of interest, we can use the formula: Interest = Principal * Rate * Time. The principal amount is Rs.10,000 and the rate is 15% p.a. for 2 months or 2/12 years. Plugging in these values, we get: Interest = 10,000 * 0.15 * (2/12) = Rs.250. Therefore, the amount of interest will be Rs.250.

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Quiz Review Timeline (Updated): Oct 18, 2023 +

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  • Current Version
  • Oct 18, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 11, 2011
    Quiz Created by
    Sweetsalman123

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