CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set B

Download CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set B in PDF format. All Revision notes for Class 11 Accountancy have been designed as per the latest syllabus and updated chapters given in your textbook for Accountancy in Standard 11. Our teachers have designed these concept notes for the benefit of Grade 11 students. You should use these chapter wise notes for revision on daily basis. These study notes can also be used for learning each chapter and its important and difficult topics or revision just before your exams to help you get better scores in upcoming examinations, You can also use Printable notes for Class 11 Accountancy for faster revision of difficult topics and get higher rank. After reading these notes also refer to MCQ questions for Class 11 Accountancy given our website

Accounting For Bills Of Exchange Class 11 Accountancy Revision Notes

Class 11 Accountancy students should refer to the following concepts and notes for Accounting For Bills Of Exchange in standard 11. These exam notes for Grade 11 Accountancy will be very useful for upcoming class tests and examinations and help you to score good marks

Accounting For Bills Of Exchange Notes Class 11 Accountancy

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“Bills of Exchange are instrument of credit which facilitate the credit sale of goods.”

INTRODUCTION;

A Bill of Exchange and Promissory Note both are legal Instruments which facilitate the credit sale of goods by assuring the seller that the amount will be recovered after a certain period. Both of these are legal instruments under the Negotiable Instruments Act, 1881.

BILL OF EXCHANGE ;

“A Bill of Exchange is an instrument in writing containing an unconditional order signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.” Section 5 of the Negotiable Instrument Act, 1881.

FEATURES OF A BILL OF EXCHANGE ARE  :

1. A Bill of Exchange must be in writing.

2. It must contain an order (and not a request) to make payment.

3. The order of payment must be unconditional .

4. The amount of bill of exchange must be certain.

5. The date of payment should be certain.

6. It must be signed by the drawer of the bill.

7. It must be accepted by the drawee by signing on it.

8. The amount specified in the bill of exchange is payable either on demand or on the expiry of a fixed period.

9. The amount specified in the bill is payable either to a certain person or to his order or to the bearer of the bill.

10. It must be stamped as per legal requirements.  

PARTIES TO A BILL OF EXCHANGE

1. DRAWER:        Drawer is the person who makes or writes the bill of exchange. Drawer is a person who has granted credit to the person on whom the bill of exchange is drawn. The drawer is entitled to receive money from the drawee (acceptor).

2. DRAWEE:       Drawee is the person on whom the bill of exchange is drawn for acceptance. Drawee is the person to whom credit has been granted by the drawer. The drawee is liable to pay money to the creditor/drawer.

3. PAYEE: Payee is the person who receives the payment from the drawee. Usually the drawer and the payee are the same person. In the following cases. drawer and payee are two different persons : (i) When the bill is discounted by the drawer from his bank- payee is the bank. (ii) When the bill is endorsed by the drawer to his creditors: payee is the endorsee.

ADVANTAGES OF BILL OF EXCHANGE

1. It helps in purchases and sales of goods on credit basis.

2. It is a legally valid document in the eyes of law. It assures a easier recovery to the drawer if drawee fails to make the payments.

3. A bill can be discounted from the bank before its date of maturity. By discounting with the bank, drawer can get the money before due date if required.

4. It can be easily transferred from one person to another by endorsement.

5. It helps in recovery of debt without sending reminders to the debtor.

6. It assures the seller about the timely recovery of debt. So a drawer and drawee can plan about its cash management.

PROMISSORY NOTE

A Promissory note is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.

FEATURES OF A PROMISSORY NOTE

1. There must be an unconditional promise to pay a certain sum of money on a certain date.

2. It must be signed by the maker.

3. The name of the payee must be mentioned on it.

4. It must be stamped according to its value.

PARTIES TO A PROMISSORY NOTE

1. The maker : The maker is the person who makes the promise to pay the amount on a certain date. Maker of a bill must sign the promissory note before giving it to the payee.

2. The payee : The payee is the person who is entitled to get the payment from the maker of promissory note. Payee is the pesson who has granted the credit. 

CBSE Class XI Accountancy - Accounting For Bills Of Exchange

IMPORTANT TERMS

1. Term of Bill : The period intervening between the date on which a bill is drawn and the date on which it becomes due for payment is called „Term of Bill‟.

2. Due Date : Due date is the date on which the payment of the bill is due.

Due date is ascertained in the following manner :

(i) In case of „Bill at sight‟ -

         Due date is the date on which a bill is presented for the payment.

(ii) In case of „Bill after Date‟ -

         Due Date = Date of Drawing + Term of Bill.

(ii) In case of „ Bill after sight‟ –

         Due date = Date of Acceptance + Term of Bill.

3. Days of Grace : Drawee is allowed three extra days after the due date of bill for making payments. Such 3 days are known as „Days of Grace‟. It is a custom to add the days of grace.

4. Date of Maturity : The date which comes after adding three days of grace to the due date of a bill is called „Date of maturity‟.

CBSE Class XI Accountancy - Accounting For Bills Of Exchange

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*Other Important Topics
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Chapter 1 Introduction to Accounting
CBSE Class 11 Accountancy Introduction To Accounting Concepts And Illustrations
CBSE Class 11 Accountancy Introduction To Accounting Notes
Chapter 2 Theory Base of Accounting
CBSE Class 11 Accountancy Theory Base Of Accounting Concepts And Illustrations
CBSE Class 11 Accountancy Theory Base Of Accounting Notes
Chapter 3 Recording of Transactions-I
CBSE Class 11 Accountancy Recording Of Transaction Concepts And Illustrations
CBSE Class 11 Accountancy Recording Of Transaction Notes
Chapter 6 Trial Balance and Rectification of Errors
CBSE Class 11 Accountancy Rectification Of Error Concepts And Illustrations
CBSE Class 11 Accountancy Rectification Of Error Notes
Chapter 7 Depreciation, Provisions and Reserves
CBSE Class 11 Accountancy Depreciation Provisions And Reserves Concepts And Illustrations
CBSE Class 11 Accountancy Depreciation Provisions And Reserves Notes
Chapter 8 Bill of Exchange
CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set A
CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set B
CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set C
Chapter 9 Financial Statements - I
CBSE Class 11 Accountancy Financial Statements Concepts And Illustrations
CBSE Class 11 Accountancy Financial Statements Notes
Chapter 11 Accounts from Incomplete Records
CBSE Class 11 Accountancy Accounts For Incomplete Records Notes Set A
CBSE Class 11 Accountancy Accounts For Incomplete Records Notes Set B
Chapter 13 Computerised Accounting System
CBSE Class 11 Accountancy Computers And Accounting Information System Notes Set A
CBSE Class 11 Accountancy Computers And Accounting Information System Notes Set B
More Notes Class 11 Accountancy
CBSE Class 11 Accountancy Full Study Material
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