CBSE Class 11 Accountancy Bills Of Exchange MCQs Set 01

Question :  Bills of Exchange contains an unconditional ____________, and Promissory note contains an unconditional _________________.
a) Order, promise
b) Payment, order
c) Promise, order
d) Payment, promise
Answer  : A

Question :  Noting charges are ultimately borne by -
a) Drawee
b) Drawer
c) Payee
d) Maker
Answer : A

Question :  A Promissory note _____________ the acceptance
a) Does not require
b) Requires
c) Makes
d) Arranges
Answer : A

Question :  B has accepted the bill drawn on him by A. Which of the following statements is correct?
a) A can endorse the bill, B cannot endorse the bill
b) A can endorse the bill
c) B cannot endorse the bill
d) B can endorse the bill
Answer : A

Question :  At the time of renewal of a bill, _____________ account is debited in the books of the drawee.
a) Interest
b) Discount
c) Rebate
d) None of the options
Answer : A

Question :  A bill of Rs. 5,000 is discounted with the banker for RS. 4,750. The bill is dishonored at maturity. The drawee pays 60% of his acceptance. What is the amount of bad debts?
a) Rs. 2,000
b) Rs. 2100
c) Rs. 1900
d) Rs. 1800
Answer : A

Question :  Refusal by the acceptor to pay the bill on the maturity date is called -
a) Dishonor of bill
b) Retirement of bill
c) Rebate on bill
d) Discounting of bill
Answer : A

Question :  Find the due date of a bill of exchange dated 9th December, 2007, payable after 45 days.
a) 25th January, 2008
b) 24th January, 2008
c) 26th January, 2008
d) 27th January, 20008
Answer : A

Question :  The party which is ordered to pay the amount is known as -
a) Drawee
b) Payee
c) Drawer
d) None of the options
Answer : A

Question :  Three days are added for ascertaining the date of maturity. These are known as days of-
a) Grace
b) Maturity
c) Payment
d) None of the options
Answer : A

Question :  A bill of exchange cannot be -
a) Crossed
b) Endorsed
c) Accepted
d) None of the options
Answer : A

Question :  If Rams acceptance which was endorsed by us in favor of Saleem is dishonored, then the amount will be debited in our books to -
a) Ram
b) Saleem
c) Bills Receivable
d) None of the options
Answer : A

Question :  A four months bill drawn on 1st January, 2008 will mature for payment on -
a) 4th May, 2008
b) 5th May, 2008
c) 3rd May, 2008
d) 6th May, 2008
Answer : A

Question :  The Bills Receivable Book is a part of
a) The Journal
b) The Ledger
c) The Profit
d) None of the options
Answer : A

Question :  The Rebate on a bill shows that the bill -
a) Has been paid before the date of maturity
b) Has been paid after the date of maturity
c) Has been dishonored
d) None of the options
Answer : A

Question :  Refusal by the acceptor to make payment of the bill on the maturity date is called __________.
a) Dishonour
b) Retirement
c) Rebate
d) Renewal
Answer : A

Question :  Canceling an old bill and drawing a new bill is called __________.
a) Renewal
b) Retirement
c) Dishonour
d) Rebate
Answer : A

Question :  A bill accepted and given to a creditor is called ________.
a) Bill Payable
b) Bill Receivable
c) Trade bill
d) Repair bill
Answer : A

Question : At the time of retirement of a bill, the acceptor debits:
a) Bills payable’account
b) Discount account
c) Neither of two
Answer : A

Question : When a bill is discharged, the acceptor debits:
a) Creditor’s account
b) Cash account
c) Bills payable account
Answer : C

Question : The due date of bill dated 1st February, 2003 for a period of 2 months shall be:
a) 4th April, 2003
b) 5th April, 2003
c) 4th May, 2003
d) 2nd February, 1993
Answer : A

Question : Accommodation bills are also termed as …………. bills.
a) Drawee bills
b) Kite bills
c) Payee bills
d) Drawer bills
Answer : B

Question : B/R stands for
a) Bank Receivable Books
b) Bank Receipt
c) Bank Rebate
d) All of them
Answer : A

Question: Who draws a bill of exchange?
a) Creditor
b) Debtor
c) Holder
d) None of the options
Answer: c

Question: When calculating the due date of the bill how many days are added as days of grace
a) 4
b) 3
c) 2
d) 0
Answer: b

Question: While calculating the due date of the bill, how many days are added to the period of the bill:
a) 4 days
b) 3 days
c) 5 days
d) Neither of the options
Answer: b

Question: X drew a bill on Y for Rs.20,000 for 3 months on 1-1-2020. The bill was discounted with banker at a charge of Rs.100. At maturity the bill was returned dishonoured, the bank paid Rs.100 as Noting charges. The bank account will be credited, in the books of X, for dishonour with:
a) Rs.19,900
b) Rs.20,000
c) Rs.20,100
d) Rs.19,800
Answer: c

Question: Bill is drawn on 20th January, 2010 for 2 months. After sight date of acceptance is 29th January, 2010. The maturity date of bill will be:
a) 1 April, 2010
b) 23 March, 2010
c) 20 March, 2010
d) 29 March, 2010
Answer: a

Question: If due date of a bill falls on a public holiday, then the maturity date is on
a) one day after the maturity date
b) one day before the maturity date
c) Public holidays
d) None of the options
Answer: b

Question: If the due date of a bill falls on a public holiday then the bill is due on:
a) One day after the due date
b) Public Holiday
c) One day before the due date
d) None of the options
Answer: c

Question: A Bill of Exchange has .... parties
a) two
b) three
c) four
d) Seven
Answer: b

Question: A bill of Rs.10,000 is renewed. The drawee pays Rs.3,000 as part payment. The amount of interest charged is Rs.200. What is the value of new bill?
a) Rs.700
b) Rs.10,200
c) Rs.9,000
d) Rs.7,200
Answer: d

Question: Encashing the bill before the due date is called from bank
a) Endorsement
b) Retirement
c) Discounting
d) Bills sent for collection
Answer: c

Question: When a drawer discounts a bill, he debits?
a) Interest account
b) Bank account
c) Drawee account
d) Bill receivable account
Answer: b

Question: A endorsed a bill drawn on B for Rs.5,000 in favour of C. On the due date bill is honoured by B. Which account will be debited by B in his books?
a) Bills Payable
b) C's Account
c) A's Account
d) Bill Receivable
Answer: a

Question: When a bill is dishonored, the holder of the bill goes to an official called?
a) Notary public
b) Manager
c) Inspector
d) Drawer
Answer: a

Question: If Ram's acceptance which was endorsed by us in favour of Saleem is dishonoured, then the amount will be debited in our books to
a) Saleem
b) Ram
c) Bills Receivable Account
d) None of the options
Answer: b

Question: On whom the trade bill drawn
a) Seller
b) Creditor
c) Debtor
d) Owner
Answer: c

Question: A bill of exchange can not be
a) Endorsed
b) Accepted
c) Refused
d) Crossed
Answer: c

Question: What are the three additional days known as that a drawer gives to the drawee for payment
a) Conditional days
b) Additional days
c) Days of grace
d) Days of rebate
Answer: c 

Question: A bill of exchange includes
a) An order to pay
b) A request to pay
c) A promise to pay
d) All of the options
Answer: a

Question: What kind of acceptance is known as when the bill is accepted without any condition?
a) Qualified acceptance
b) Conditional acceptance
c) Blank acceptance
d) General acceptance
Answer: d

Question: Noting charges are to be paid to
a) Income tax department
b) Court
c) Notary
d) Company secretary
Answer: c

Fill in the blanks with suitable word(s)

Question : Transfer of a negotiable instrument to another person by signing on it, is known as ……………….
Answer : Endorsement

Question : A person who endorses the promissory note in favour of another is known as ………………
Answer : Endorser

Question : A bill of exchange is drawn by the …………….. upon his ………………
Answer : drawer, drawee

Question : There are ………………. parties to a bill of exchange.
Answer : three

Question : Drawer and ………………… cannot be the same parties in case of a bill of exchange.
Answer : drawee

Question : …………….. days of grace are added in terms of the bill to calculate the date of its ………………….
Answer : Three, maturity

Write ‘True’ or ‘False’ against each statement regarding a bill of exchange

Question : A bill of exchange is drawn by the creditor.
Answer : True

Question : A bill payable on demand is called Time bill.
Answer : False

Question : A negotiable instrument does not require the signature of its maker.
Answer : False

Question : A negotiable instrument is not freely transferable.
Answer : False

Question : The time of payment of a-negotiable instrument need not be certain.
Answer : True