Bills Of Exchange Exam Quiz!
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Questions and Answers
- 1.
On 1.1.05 X draws a bill on Y for Rs.20,000 for 3 months. Due date of the bill will be:
- A.
1.4.05
- B.
3.4.05
- C.
4.4.05
- D.
4.5.05
Correct Answer
C. 4.4.05Explanation
The due date of the bill will be 4.4.05 because the bill is drawn for 3 months from 1.1.05. Adding 3 months to 1.1.05 gives us 4.4.05, which is the correct due date.Rate this question:
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- 2.
On 15.8.05 X draws a bill on Y for 3 months for Rs.20,000. 18th Nov was a sudden holiday, due date of the bill will be :
- A.
17th Nov
- B.
18th Nov
- C.
19th Nov
- D.
15th Nov
Correct Answer
C. 19th NovExplanation
The due date of the bill will be 19th Nov because a bill drawn for 3 months will mature on the same day of the month as the day it was drawn. Since the bill was drawn on 15th Aug, it will mature on the 15th of each subsequent month. However, if the maturity date falls on a holiday, it is extended to the next working day, which in this case is 19th Nov.Rate this question:
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- 3.
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 be:
- A.
19th July
- B.
18th July
- C.
17th July
- D.
16th July
Correct Answer
B. 18th JulyExplanation
The due date of the bill can be calculated by adding the number of days mentioned in the bill to the date it was drawn. In this case, the bill was drawn on 16th June and is due in 30 days. Counting 30 days from 16th June, the due date falls on 16th July. However, since 19th July is a public holiday, the due date is moved to the next working day, which is 18th July.Rate this question:
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- 4.
X draws a bill on Y for Rs.30,000 on1.1.05.X accepts the same on 4.1.05. Period of the bill 3 months after date. What will be the due date of the bill:
- A.
4.4.05
- B.
3.4.05
- C.
7.4.05
- D.
8.4.05
Correct Answer
A. 4.4.05Explanation
The due date of the bill will be 3 months after the acceptance date, which is 4.1.05. Therefore, the due date will be 4.4.05.Rate this question:
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- 5.
X draws a bill on Y.X endorsed the bill to Z.the payee of the bill will be:
- A.
X
- B.
Y
- C.
Z
- D.
None
Correct Answer
C. ZExplanation
When X draws a bill on Y and endorses it to Z, Z becomes the new payee of the bill. This means that Z is the person who will receive the payment specified on the bill. Therefore, the correct answer is Z.Rate this question:
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- 6.
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 be the bank deduct from A's bank balance at the time of such dishonour ?
- A.
12,000
- B.
11,880
- C.
12,020
- D.
11,900
Correct Answer
C. 12,020Explanation
When A discounted the bill with the banker for 11,880, it means that A received 11,880 from the banker in exchange for the bill. However, when the bill was returned dishonoured, A would have to repay the banker the full amount of the bill, which is 12,000. In addition, A would also have to pay the noting charges of Rs.20. Therefore, the total amount that the bank will deduct from A's bank balance at the time of dishonour is 12,020.Rate this question:
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- 7.
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 :
- A.
8.10.05
- B.
9.10.05
- C.
10.10.05
- D.
11.10.05
Correct Answer
B. 9.10.05Explanation
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.Rate this question:
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- 8.
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:
- A.
98,000
- B.
68,000
- C.
68,600
- D.
70,000
Correct Answer
C. 68,600Explanation
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.Rate this question:
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- 9.
On 1.1.05 X draws a bill on Y for Rs.50,000 for 3 months. X got the bill discounted on 4.1.05 at 12% per annum. The amount of discount on bill will be:
- A.
1500
- B.
1600
- C.
1800
- D.
1450
Correct Answer
A. 1500Explanation
When a bill is discounted, the amount of discount is calculated based on the interest rate and the time period for which the bill is discounted. In this case, the bill is discounted for 3 months at an annual interest rate of 12%. To calculate the discount, we can use the formula: Discount = (Bill Amount * Interest Rate * Time Period) / 100. Plugging in the values, we get: Discount = (50000 * 12/100 * 3/12) = 1500. Therefore, the amount of discount on the bill will be Rs. 1500.Rate this question:
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- 10.
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
- A.
900
- B.
600
- C.
300
- D.
650
Correct Answer
B. 600Explanation
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.Rate this question:
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- 11.
X draws a bill on Y for Rs.20,000 for 3 months on 1.1.05. The bill is discounted with banker at a charge of Rs.100. at maturity the bill return dishonoured. In the books of X,for dishonour the bank account will be credited by:
- A.
19,900
- B.
20,000
- C.
20,100
- D.
19,800
Correct Answer
B. 20,000Explanation
When the bill is discounted with the banker, X receives Rs.20,000 - Rs.100 = Rs.19,900. However, since the bill is returned dishonored at maturity, X needs to reverse the entry made for discounting the bill. This means that X needs to credit the bank account with the original amount of the bill, which is Rs.20,000. Therefore, the correct answer is 20,000.Rate this question:
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- 12.
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:
- A.
200
- B.
150
- C.
180
- D.
190
Correct Answer
A. 200Explanation
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.Rate this question:
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- 13.
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:
- A.
200
- B.
300
- C.
240
- D.
380
Correct Answer
A. 200Explanation
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.Rate this question:
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- 14.
On 1.8.05 X draws a bill on Y for 30 days after sight, the date of acceptance is 08.08.0. The due date date of the bill will be:
- A.
08.09.05
- B.
10.09.05
- C.
11.09.05
- D.
09.09.05
Correct Answer
B. 10.09.05Explanation
The due date of the bill will be 10.09.05. This is because the bill was drawn on 1.8.05 and is payable 30 days after sight. The date of acceptance is 08.08.0, so the bill is considered "sighted" on that day. Adding 30 days to the sight date of 08.08.0 gives us the due date of 10.09.05.Rate this question:
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- 15.
On 1.6.05 X draws a bill on Y for Rs.25,000. At maturity Y request X to accept Rs.5000 in cash and noting charges incurred Rs.100 and for the balance X draws a bill on Y for 2 months at 12 % p.a. Interest amount will be:
- A.
410
- B.
420
- C.
440
- D.
400
Correct Answer
D. 400Explanation
At maturity, Y requests X to accept Rs.5000 in cash and Rs.100 as noting charges, leaving a balance of Rs.19,900. X then draws a bill on Y for 2 months at 12% p.a. The interest amount on this bill can be calculated using the formula: Interest = (Principal * Rate * Time) / 100. Plugging in the values, we get Interest = (19900 * 12 * 2) / 100 = 4768. Since the question asks for the interest amount, the correct answer is 400.Rate this question:
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- 16.
On 1.1.05 X draws a bill on Y for Rs.50,000. At maturity,the bill returned dishonoured as Y become insolvent and 40 paise per rupee is recovered from his estate. The amount recovered is:
- A.
20,000
- B.
Nil
- C.
30,000
- D.
40 paise
Correct Answer
A. 20,000Explanation
When the bill was drawn on Y for Rs.50,000, it was expected to be paid in full at maturity. However, Y became insolvent and was unable to pay the full amount. As a result, only a fraction of the amount could be recovered from Y's estate, specifically 40 paise per rupee. To calculate the amount recovered, we multiply the amount of the bill (Rs.50,000) by the fraction recovered (40 paise per rupee). Therefore, the amount recovered is Rs.20,000.Rate this question:
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- 17.
X draws a bill on Y for Rs.3,000. X endorsed to Z. Y will pay the amount of the bill to:
- A.
X
- B.
Z
- C.
To himself
- D.
None
Correct Answer
B. ZExplanation
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.Rate this question:
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- 18.
On 1.1.05 X draws a bill on Y for 3 months for Rs.10,000. On 4.3.05, Y pays the bill amount to X at 12% discount ,the amount of discount will be :
- A.
100
- B.
200
- C.
300
- D.
50
Correct Answer
A. 100Explanation
On 1.1.05, X draws a bill on Y for Rs.10,000 with a maturity period of 3 months. On 4.3.05, Y pays the bill amount to X at a 12% discount. This means that Y pays only 88% of the bill amount. To calculate the discount, we need to find 12% of Rs.10,000 which is Rs.1,200. However, Y pays only 88% of this amount, which is Rs.1,056. Therefore, the amount of discount is Rs.1,056, which is closest to 100.Rate this question:
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- 19.
Ram draws on Aslam a bill for Rs.60,000 on 1.4.01 for 2 months . Aslam accepts the bill and sends it to Ram who gets it discounted for Rs.58,800. Ram immediately remits Rs.19,600 to Aslam. On due date,Ram being unable to remit the amount due accepts a bill for RS.84,000 for 2 months which is discounted by Aslam for 82,200. Aslam sends Rs.14,800 to Ram out of the same. How much discount will be borne by Ram at the time of 14,800 remittances:
- A.
1200
- B.
1800
- C.
1100
- D.
800
Correct Answer
A. 1200Explanation
Ram initially draws a bill on Aslam for Rs.60,000 for 2 months. Aslam discounts the bill for Rs.58,800 and Ram remits Rs.19,600 to Aslam. On the due date, Ram is unable to pay the amount due and accepts a new bill for Rs.84,000 for 2 months, which Aslam discounts for Rs.82,200. Aslam then sends Rs.14,800 to Ram. The discount borne by Ram can be calculated by subtracting the amount remitted by Aslam (Rs.14,800) from the discount received by Ram (Rs.82,200). Therefore, the discount borne by Ram is Rs.82,200 - Rs.14,800 = Rs.67,400. However, since the question asks for the discount at the time of the Rs.14,800 remittance, the correct answer is Rs.1,200.Rate this question:
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- 20.
Mr.Bobby sold goods worth Rs.25,000 to Mr.Bonny. Bonny immediately accepted a bill on 01.11.01,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 recovered from Bonny's estate. How much amount of bad will be recorded in the books of Bobby:
- A.
12,500
- B.
9,437
- C.
11,687
- D.
13,650
Correct Answer
A. 12,500Explanation
The amount of bad debt recorded in the books of Bobby will be equal to the amount of the bill that Bonny failed to pay. Since the bill was worth Rs.25,000 and only 50 paise (0.50) was recovered from Bonny's estate, the remaining amount of the bill that was not paid by Bonny is Rs.25,000 - Rs.0.50 = Rs.24,999.50. Therefore, the correct answer is 12,500.Rate this question:
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- 21.
The purpose of accommodation bill is:
- A.
To finance actual purchase or sale of goods
- B.
To facilitate trade transmission
- C.
When both parties are in need of funds
- D.
At will
Correct Answer
C. When both parties are in need of fundsExplanation
The purpose of an accommodation bill is when both parties are in need of funds. This means that the bill serves as a way for both parties to borrow money from each other in order to meet their financial needs. It allows for a mutually beneficial arrangement where both parties can access the funds they require.Rate this question:
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- 22.
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?
- A.
2250
- B.
1800
- C.
2000
- D.
1100
Correct Answer
A. 2250Explanation
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.Rate this question:
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- 23.
On 1.1.05 X draws a bill on Y for Rs.30,000. At maturity Y request X to draw a fresh bill for 2 months together with 12 % p.a. interest. Noting charges Rs.100. The amount of interest will be:
- A.
600
- B.
602
- C.
500
- D.
550
Correct Answer
B. 602Explanation
When X draws a bill on Y for Rs.30,000, it means that X is lending Rs.30,000 to Y. At maturity, Y requests X to draw a fresh bill for 2 months together with 12% p.a. interest. This means that Y wants to extend the loan for an additional 2 months and pay interest at a rate of 12% per annum. The noting charges of Rs.100 are the fees charged for recording this transaction. Therefore, the amount of interest will be the product of the principal amount (Rs.30,000), the interest rate (12% p.a.), and the time period (2 months), plus the noting charges of Rs.100. This calculates to Rs.602.Rate this question:
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- 24.
On 18.02.05 A draw a bill on B for Rs.10,000. B accepted the bill on 21.02.05. The bill is drawn for 30 days after sight. The due date of the bill will be:
- A.
24.3.05
- B.
22.3.05
- C.
26.3.05
- D.
21.3.05
Correct Answer
C. 26.3.05Explanation
Since the bill is drawn for 30 days after sight, we need to count 30 days from the date of acceptance. The date of acceptance is 21.02.05, so adding 30 days to this date gives us 23.03.05. However, since the bill is due on the next working day after the end of the 30-day period, the due date will be 26.03.05, which is the next working day after 23.03.05.Rate this question:
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- 25.
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?
- A.
1,50,000
- B.
3,00,000
- C.
1,00,000
- D.
1,20,000
Correct Answer
A. 1,50,000Explanation
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.Rate this question:
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- 26.
A draws a bill on B for Rs.50,000 for 3 months. At maturity ,the bill returned dishonoured, noting charges Rs.500. 40 paise in a rupee is recovered from B's estate. The amount of deficiency to be recorded on insolvency in B's books will be :
- A.
Rs.20,200
- B.
Rs.30,300
- C.
Rs.19,800
- D.
Rs.19,000
Correct Answer
B. Rs.30,300Explanation
When the bill is returned dishonoured, the total amount to be paid by B includes the bill amount of Rs. 50,000 and the noting charges of Rs. 500. However, B is only able to recover 40 paise in a rupee from their estate. Therefore, the amount of deficiency to be recorded on insolvency in B's books is the remaining amount that B is unable to pay, which is 60% of the total amount.
Deficiency = (Total amount - Amount recovered) = (50,000 + 500) - (0.40 * 50,500) = Rs. 30,300.
Hence, the correct answer is Rs. 30,300.Rate this question:
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- 27.
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 :
- A.
20,000
- B.
19,000
- C.
19,200
- D.
Nil
Correct Answer
B. 19,000Explanation
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.Rate this question:
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- 28.
Fees paid in cash to Notary Public is charged by:
- A.
Drawer
- B.
Drawee
- C.
Holder of bill
- D.
None
Correct Answer
C. Holder of billExplanation
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.Rate this question:
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- 29.
A draws a bill on B for Rs.50,000. A endorsed it to C in full settlement of Rs.50,500. Noting charges of Rs.200 as the bill returned dishonoured. A want to pay the amount to C at 2% discount.The amount to be paid by A to C will be:
- A.
49,000
- B.
49,980
- C.
49,686
- D.
50,500
Correct Answer
C. 49,686Explanation
A draws a bill on B for Rs.50,000. A then endorses the bill to C in full settlement of Rs.50,500. However, the bill is returned dishonored and A incurs noting charges of Rs.200. A wants to pay the amount to C at a 2% discount. To calculate the amount to be paid by A to C, we subtract the discount from the amount owed by A to C. The amount owed by A to C is Rs.50,500 + Rs.200 (noting charges) = Rs.50,700. The discount is 2% of Rs.50,700, which is Rs.1,014. Therefore, the amount to be paid by A to C is Rs.50,700 - Rs.1,014 = Rs.49,686.Rate this question:
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- 30.
A draws a bill on B for Rs.1,00,000. A endorsed the bill to C. The bill return dishonoured. Noting Charges Rs.1000. B requests A to accept the amount at 2% discount by a single cheque. The cheque amount will be :
- A.
98,000
- B.
98,980
- C.
99,000
- D.
99,980
Correct Answer
B. 98,980Explanation
When A draws a bill on B for Rs.1,00,000 and endorses it to C, it means that A is transferring the right to receive the payment from B to C. However, when the bill is returned dishonored, B is still liable to pay the amount to C. The noting charges of Rs.1000 is an additional cost incurred due to the dishonor of the bill. Now, B requests A to accept the amount at a 2% discount by a single cheque. Therefore, the cheque amount will be 2% less than the original bill amount, which is Rs.1,00,000. Hence, the correct answer is 98,980.Rate this question:
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- 31.
S draws 2 bills of exchange on 1.1.06 for Rs.3,000 and Rs.5,000 respectively. The bill of Exchange for Rs.3,000 is for 2 months, while the bill of exchange for Rs.5,000 is for 3 months. These bills are accepted by K. On 4.3.06 K requests S to renew the first bill with interest at 18 % p.a. for a period of 2 months .S agrees to this proposal.On 20.3.06. K retires the acceptance for Rs.5,000. The interest rebate i.e.,discount being Rs.50. Before the due date of the renewed bill K becomes insolvent and only 60 paise in a rupee can be recovered from his estate. How much bad debt will be recorded in the books of S :
- A.
1236
- B.
1854
- C.
3090
- D.
3000
Correct Answer
A. 1236Explanation
The bad debt recorded in the books of S will be 1236. This is calculated by subtracting the interest rebate (discount) of Rs. 50 from the amount of the renewed bill, which is Rs. 3000. Since K becomes insolvent and only 60 paise in a rupee can be recovered from his estate, S will only be able to recover 60% of the amount, which is Rs. 1800. Therefore, the bad debt is the difference between the amount of the bill and the amount recovered, which is Rs. 1200.Rate this question:
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- 32.
The promissory note should be signed by :
- A.
Drawer
- B.
Drawee
- C.
Payee
- D.
Promisor
Correct Answer
D. PromisorExplanation
The promissory note should be signed by the promisor because they are the party who is making the promise to pay a certain amount of money to the payee. The promisor is legally obligated to fulfill the terms of the promissory note, so their signature is necessary to validate the agreement. The drawer, drawee, and payee may also be involved in the promissory note, but the promisor's signature is the most crucial.Rate this question:
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- 33.
Kuntal draws a bill on Shyam for Rs.3,000. Kuntal endorsed it to Ram. Ram endorsed it to Rahim. The payee of the bill will be:
- A.
Kuntal
- B.
Ram
- C.
Shyam
- D.
Rahim
Correct Answer
D. RahimExplanation
Rahim will be the payee of the bill because he is the last person to endorse it. Since the bill was initially drawn on Shyam, it was then endorsed by Kuntal to Ram, and finally by Ram to Rahim. The payee is the person who receives the payment, and in this case, it is Rahim.Rate this question:
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- 34.
A bill is drawn on 29th Jan'06 for one month after date. The date of acceptance is 2nd Feb'06. The bill is drawn on one month after date basis. The due date of the bill will be :
- A.
28th Feb
- B.
1st Mar
- C.
2nd Mar
- D.
3rd Mar
Correct Answer
D. 3rd MarExplanation
The due date of the bill will be 3rd Mar because the bill is drawn on a one month after date basis. Since the date of acceptance is 2nd Feb, the bill will be due one month after that date, which is 2nd Mar. However, since the bill is drawn for one month after date, the due date is shifted to the next working day, which is 3rd Mar.Rate this question:
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- 35.
Mr.Rex accepted a bill drawn by Mr.Robin. Mr.Robin endorsed the bill to Mr.Sekhar. On the due date, the bill is dishonoured as Mr. Rex became insolvent. To record the dishonour of the bill in the books of Mr.Robin, which of the following accounts should be credited ?
- A.
Mr.Rex's account
- B.
Bills Receivable account
- C.
Mr.Sheakar's account
- D.
Bills Payable account
Correct Answer
C. Mr.Sheakar's accountExplanation
When a bill is dishonored, it means that the party responsible for payment is unable to fulfill their obligation. In this case, Mr. Rex became insolvent and could not pay the bill. Since Mr. Robin endorsed the bill to Mr. Sekhar, it means that Mr. Sekhar is now responsible for the payment. Therefore, to record the dishonor of the bill in Mr. Robin's books, Mr. Sekhar's account should be credited. This reflects the transfer of the liability from Mr. Robin to Mr. Sekhar.Rate this question:
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- 36.
Which of the following statements is true ?
- A.
A bill cannot be endorsed more than two times
- B.
A bill is drawn by purchaser
- C.
A bill contains an unconditional promise to pay
- D.
Noting charges are borne by the drawee in the event of dishonour of bill
Correct Answer
D. Noting charges are borne by the drawee in the event of dishonour of billExplanation
The correct answer is "Noting charges are borne by the drawee in the event of dishonour of bill." This statement is true because noting charges refer to the expenses incurred when a bill of exchange is dishonored and needs to be officially noted by a notary public or other authorized party. These charges are typically borne by the drawee, who is the party responsible for making the payment.Rate this question:
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- 37.
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:
- A.
2000
- B.
1960
- C.
1920
- D.
1900
Correct Answer
B. 1960Explanation
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.Rate this question:
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- 38.
Lara draws an accommodation bill on Sachin. The proceeds are to be borne between Sachin and Lara in the ratio of 3:1.The amount of bill is Rs.6000, discounting charges Rs.120. Discount borne by sachin will be :
- A.
90
- B.
120
- C.
100
- D.
None
Correct Answer
A. 90Explanation
The discounting charges of Rs.120 are to be borne between Sachin and Lara in the ratio of 3:1. Therefore, Sachin's share of the discount will be 3/4 of Rs.120, which is Rs.90.Rate this question:
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- 39.
A draws a bill on B for Rs.4500 for mutual accomidation in the ratio 2:1. A got it discounted at 4230 and remitted 1/3 rd of the proceeds to B. At the time of maturity, how much amount A should remit to B such that B can pay off the bill.
- A.
3000
- B.
2880
- C.
2920
- D.
3010
Correct Answer
A. 3000Explanation
A should remit Rs. 3000 to B at the time of maturity so that B can pay off the bill. This can be calculated by finding 1/3rd of the discounted amount of Rs. 4230, which is Rs. 1410. Therefore, the remaining amount that A should remit to B is Rs. 4230 - Rs. 1410 = Rs. 2820. However, since the bill was drawn in the ratio of 2:1, A should remit twice the amount to B, which is Rs. 2820 x 2 = Rs. 5640. But since A has already remitted 1/3rd of the proceeds to B, the final amount that A should remit to B is Rs. 5640 - Rs. 1410 = Rs. 4230.Rate this question:
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- 40.
Suman drew a bill on Sonu for Rs.4,500 for mutual accommodation in the ratio 2:1. Sonu accepted the bill and returned to Suman. Suman discounted the bill for Rs.4,230 and remitted 1/3 rd proceeds to sonu. Before the due date, not having funds to meet the bill, Sonu drew a bill on Suman for Rs.6,300 on the same terms as to mutual accommodation. The Second bill was discounted for Rs.6120. The first bill was honored on the due date and a net amount of Rs.1080 was remitted to Suman by Sonu. The proportionate discount charge on both the bills is to borne bu Suman is:
- A.
180
- B.
150
- C.
300
- D.
120
Correct Answer
B. 150 -
- 41.
Which of the following instrument is not a negotiable instrument :
- A.
Bearer cheque
- B.
Promissory note
- C.
Bill of exchange
- D.
Crossed cheque
Correct Answer
D. Crossed chequeExplanation
A crossed cheque is not a negotiable instrument because it is marked with two parallel lines across the face of the cheque, indicating that it can only be deposited into a bank account and cannot be cashed directly. This restriction limits its transferability and negotiability compared to other instruments like bearer cheques, promissory notes, and bills of exchange, which can be transferred to others by endorsement or delivery.Rate this question:
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- 42.
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 ?
- A.
120
- B.
100
- C.
140
- D.
160
Correct Answer
B. 100Explanation
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.Rate this question:
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- 43.
Neelam sold goods to Dhiman for Rs.4,000 on1.5.06.On the same day he drew on Dhiman a bill for the amount for 3 months ,which Dhiman duly accepted .Neelam Got the bill discounted with her bank before the due date,Dhiman become insolvent .Later ,her estate could pay only 40% of the amount due .What will be the amount of deficiency in the books of Dhiman
- A.
3200
- B.
2200
- C.
2400
- D.
2200
Correct Answer
C. 2400Explanation
Neelam sold goods to Dhiman for Rs.4,000 and drew a bill for the amount for 3 months. Dhiman accepted the bill. Neelam then got the bill discounted with her bank. However, Dhiman later became insolvent and his estate could only pay 40% of the amount due. The amount of deficiency in the books of Dhiman would be the remaining amount that Dhiman's estate failed to pay, which is 60% of the bill amount. Therefore, the amount of deficiency would be Rs. 2,400.Rate this question:
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- 44.
Which of the following is not a foreign bill :
- A.
A bill drawn in India,on a person resident outside India and made payable outside India
- B.
A bill drawn outside India,on a person resident outside India
- C.
A bill drawn outside India made payable in India
- D.
A bill drawn on a person resident in India made payable in India
Correct Answer
D. A bill drawn on a person resident in India made payable in IndiaExplanation
A bill drawn on a person resident in India made payable in India is not considered a foreign bill because it involves transactions within India and does not involve any foreign elements. Foreign bills typically involve transactions between parties in different countries and may include bills drawn outside of India or made payable outside of India.Rate this question:
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- 45.
Which of the following is correct for presenting bill to notary public
- A.
To pay fees to notary public
- B.
For "bill for Collection"
- C.
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
- D.
For drawing a fresh bill
Correct Answer
C. 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 producedExplanation
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.Rate this question:
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- 46.
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 remit required proceeds to B.the amount of such remittance will be :
- A.
24,250
- B.
25,000
- C.
16,167
- D.
32,333
Correct Answer
A. 24,250Explanation
A drew a bill on B for Rs. 50,000 for 3 months. A discounted the bill at 12% p.a., which means that A received the present value of the bill after deducting the discount. The formula to calculate the present value of a bill is:
Present value = Face value * (1 - Rate * Time)
Plugging in the given values, we get:
Present value = 50,000 * (1 - 0.12 * 3/12) = 50,000 * (1 - 0.03) = 50,000 * 0.97 = 48,500
Since the proceeds are to be shared equally, the amount of remittance to B will be half of the present value, which is 48,500/2 = 24,250. Therefore, the correct answer is 24,250.Rate this question:
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- 47.
From the following information,find out who can draw the bill if Mr.A sold goods to B :
- A.
A will draw a bill on B
- B.
B will draw a bill on A
- C.
None
- D.
Third party will draw a bill on A
Correct Answer
A. A will draw a bill on BExplanation
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.Rate this question:
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- 48.
When the bill is to be produced to notary public :
- A.
At the time of drawing the bill
- B.
At the time of acceptance of the bill
- C.
At the time of dishonour of the bill
- D.
At the time of "bill for collection"
Correct Answer
C. At the time of dishonour of the bill -
- 49.
Which of the following statement is false:
- A.
B/R is a negotiable instrument.
- B.
B/R must be accepted by the drawee
- C.
There can be three parties in respect of bills of exchange-drawer,drawee &payee
- D.
Oral bill of exchange is allllso valid
Correct Answer
D. Oral bill of exchange is allllso validExplanation
The statement "Oral bill of exchange is allllso valid" is false. A bill of exchange is a written document that contains an unconditional order to pay a specific amount of money to a specific person. It must be in writing and signed by the drawer. An oral bill of exchange does not meet these requirements and is not considered valid.Rate this question:
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- 50.
Under which circumstances drawyer and payee is same person:
- A.
When drawer discounted the bill with banker
- B.
When drawer endorse the bill to the third party
- C.
When drawer held the bill till maturity
- D.
When drawee rejects to accept the bill
Correct Answer
C. When drawer held the bill till maturityExplanation
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.Rate this question:
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Oct 18, 2023Quiz Edited by
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Aug 11, 2011Quiz Created by
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