CBSE Class 11 Accountancy Bills Of Exchange MCQs Set D

Question: The Bills Receivable book is part of
a) Journal
b) Ledger
c) Trial balance
d) Balance sheet
Answer: a

Question: A draws a bill on X for ₹ 1,20,000 for 3 months. A got the bill discounted at a rate of 12%. The amount of discount will be
a) ₹ 3,600
b) ₹ 2,400
c) ₹ 1,200
d) ₹ 2,600
Answer: a

Question: Noting charges are incurred
a) On Renewal of a bill
b) On Dishonour of a bill
c) On Retirement of a bill
d) On Endorsement of a bill
Answer: b

Question: A draws a bill on B for ₹ 1,50,000. A endorsed it to C in full settlement of ₹ 1,51,500. Noting charges of ₹ 600, as the bill returned dishonoured. A wants to pay the amount to C at 2% discount. The amount to be paid by A to C will be
a) ₹ 1,37,000
b) ₹ 1,38,470
c) ₹ 1,49,058
d) ₹ 1,51,500
Answer: c

Question: A bill of exchange is order to Make payment by
a) Conditional
b) Unconditional
c) Conditional & Unconditional both
d) None of the options
Answer: b

Question: A bills of exchange is drawn by a ……… .
a) shareholder
b) debtor
c) creditor
d) foreigner
Answer: c

Question: When rebate on a Bill allowed
a) On Renewal of a bill
b) On Dishonour of a bill
c) On Retirement of a bill
d) On Endorsement of a bill
Answer: c

Question: Bill draw on 23rd Oct.2018 for three months due date is
a) 23rd Jan.2019
b) 24th Jan.2019
c) 25th jan.2019
d) 26th jan.2019
Answer: c

Question: ‘‘Sometimes the purchaser of the goods himself writes a note, signs it and gives it to the seller of the goods.’’ This type of instrument is known as
a) Credit note
b) Promissory note
c) Debit note
d) All of the options
Answer: b

Question: Liability for a discounted bill is a
a) Contingent liability
b) Current liability
c) Non-current Liability
d) None of the options
Answer: a

Question: Bill at sight has a grace period of
a) One day
b) Two days
c) Three days
d) None of the options
Answer: d

Question: Which of the following Act defines the bills of exchange?
a) Indian Partnership Act, 1932
b) Indian Companies Act, 2013
c) Indian Negotiable Instrument Act, 1881
d) None of the options
Answer: c

Question: A bill of ₹ 12,000 was discounted by A with the banker for ₹ 11,880. At maturity, the bill returned dishonoured, with noting charges ₹ 20. How much amount will 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
Answer: c

QuestionWhich of the following is a type of bills of exchange?
a) Trade bill
b) Accommodation bill
c) Promissory note
d) Both Trade bill and Accommodation bill
Answer: d

Question: ‘‘I owe you ₹ 50,000,’’ it is a
a) promissory note
b) bill of exchange
c) acknowledgement of debt
d) None of the options
Answer: c

Question: Which among the following will be the journal entry in the books of drawer for sending the bill for collection?
a) Bill Sent for Collection A/c Dr
To Drawee
b) Bill Sent for Collection A/c Dr
To Bills Receivable A/c
c) Drawee A/c Dr
To Bill Sent for Collection A/c
d) None of the options
Answer: b

Question: X draws a bill on Y for ₹ 10,000. The bill is duly accepted by Y. On due date, bill was dishonoured and X paid ₹ 200 as noting charges. Which of the undermentioned journal entries reflect correct entry at the time of dishonour in books of X?
a) Y Dr 10,200
To Bills Receivable A/c 10,200
b) Y Dr 10,200
To Cash A/c 10,200
c) Y Dr 10,200
To Bills Receivable A/c 10,000
To Cash A/c 200
d) Bills Receivable A/c Dr 10,200
To Y 10,200
Answer: c

Question: Which of the following statements are correct?
(i) Three days added for ascertaining the date of maturity of bills of exchange are called grace days.
(ii) The person in whose favour an endorsement of bills of exchange is made is called endorsee.
(iii) The fee charged for getting the bill noted is called noting charges.
Alternatives
a) (ii) and (iii) are correct
b) (i) and (ii) are correct
c) (i) and (iii) are correct
d) All are correct
Answer: d

Case Based MCQs :

Rakesh runs a boutique in Karol bagh, Delhi. 80% of his transactions are on credit. Therefore, to avoid any default on part of buyers, he always use bills of exchange.
On 1st February, 2021, Ritika purchased goods worth ₹ 40,000 on credit. Ritika requested him to drew three bills of exchange instead of one. Therefore, he drew on her, three bills of exchange for ₹ 15,000, ₹ 13,000 and ₹ 12,000 respectively. These bills were for 1 month, 2 months and 3 months respectively.
The first bill was endorsed to his creditor, Anuj.
The second bill was discounted with his bank on 4th February, 2021 @ 12% p.a. and the third bill was sent to bank for collection on 30th April, 2021. On the due dates, all bills were duly met by Ritika) Bank sent the collection advice for the third bill after deducting ₹ 75 as collection charges.

Question: Which of the aforementioned journal entry willbe passed in books of Rakesh for discounting 2nd bill with the bank?
a) Bank A/c Dr 12,740
To Bills Receivable (No.2) 12,740
b) Bank A/c Dr 12,740
Discounting Charges A/c Dr 260
To Bills Receivable (No.2) 13,000
c) Bank A/c Dr 13,000
To Bills Receivable A/c (No.2) 13,000
d) Bank A/c Dr 11,440
Discounting Charges A/c Dr 1,560
To Bills Receivable (No.2) A/c 13,000
Answer: b

Question: Which of the undermentioned journal entry will be passed in the books of Ritika if Rakesh send third bill to bank for collection?
a) Bill Sent for Collection A/c Dr 12,000
To Bills Receivable (No.3) A/c 12,000
b) Bills Payable A/c (No.3) Dr 12,000
To Bill Sent for Collection A/c 12,000
c) Bill Sent for Collection A/c Dr 12,000
To Rakesh A/c 12,000
d) Nil
Answer: d

Question: The person to whom bill is endorsed is called ……… .
a) Endorser
b) Endorsee
c) Acceptor
d) Acceptee
Answer: b

Question: Which of the following journal entry shows the correct treatment for third bill on its due date?
a) Bank A/c Dr 11,925
To Bill Sent for Collection A/c 11,925
b) Bank A/c Dr 11,925
Bank Charges A/c Dr 75
To Bill Sent for Collection A/c 12,000
c) Bank A/c Dr 12,000
To Bill Sent for Collection A/c 12,000
d) Bank A/c Dr 11,925
Bank Charges A/c Dr 75
To Bills Receivable (No.3) A/c 12,000
Answer: b

Fill In The Blanks.

Question: Bill of Rs.5,000 receivable after two months discounted @ 6% p.a), after discounting bank will pay Rs. ………
Answer: 4550

Question: A person who draws the bill is known as………..
Answer: drawer

Question: Bills of exchange are accepted by ……
Answer: buyer/ Drawee

Question: If maturity date of bill is national holiday then due date will be ……
Answer: Previous working day

Question: Mr. Rahul bought goods of Rs. 40,000 and accepted 4 numbers of bills with equal amount payable after 1 month, 2 months, 3months and 4 months with interest @10% p.a. total interest of Rs…….. is paid immediately on all bills.
Answer: 833.33

Question: Neha failed to pay her acceptance of rs.12000 (noting charges rs.100) and requited for new bill of rs………with interest @6% for 3 months.
Answer: 12285.5

Question: There is contingent liability of Mr. Mohan towards bank because he gets the bill………..
Answer: discounted

Question: Bills receivable account comes under …….Assets in balance sheet.
Answer: current

True/False.

Question: A liability to pay the noting charges is always associated with drawee.
Answer: True

Question: If on maturity date of bill is national holiday then maturity date will be next working day.
Answer: False

Question: ‘A’ draws a bill on ‘B’, here A is drawer.
Answer: True

Question: A charge collected by bank on dishonoured is known as rebate.
Answer: False

Question: Drawee may have to pay interest to the drawer for the extended period of credit.
Answer: True

Question: ‘B’ accepted a bill from ‘A’ now in any case payer can be change.
Answer: False

Question: When discounted bill is dishonoured debtor is debited in the book of drawer.
Answer: True

Question: Dharma transfer a Rs.5,000 bill to his creditor is called endorsement.
Answer: True

Question: Bill of exchange is a convenient way of credit.
Answer: True

Question: Ram draws a bill on Shyam which is ‘bill at sight’ on 28 March and pay as soon as possible. Then days of grace will be added for computing due date.
Answer: False

Match The Following

Question: Match the terms-
i) Request for new bill                                                      a) Retiring of bill
ii) Non- payment of bill amount on maturity                     b) Dishonour of bill
                                                                                         c) Renewal of Bill
Answer: (i)-c, (ii) -b

Question: Identify the terms-
i) The bill kept till maturity                                   a) Dishonoured
ii) The bill is transferred to creditor                     b) Retirement of bill
iii) Payment of bill before due date                     c) Bill is retained
                                                                           d) Endorsement
Answer: (i)-c, (ii) -d, (iii)-b

Question: Bill draws on
i) 1st July (for Two month)                           a) 4 th Sep.
ii) 15th July ( for Three months)                  b) 4 th Dec.
iii) 1st August (for four months)                   c) 18 th Oct.
Answer: (i)-a, (ii) -c, (iii)-b

Question: Identify–
i) Charge Deducted by Notary Public                                                    a) Bank Charges
ii) Charges deducted by bank at the time of discount of bill                  b) Noting Charges
                                                                                                               c) Discounting Charges
                                                                                                               d) SMS Charges
Answer: (i)-b, (ii) -c

Question: Identify–
i) A draws bill                                     a) C is Drawee
ii) B accepts the bill                           b) A is Drawer
iii) A endorsed bill to C                      c) B is Drawer
                                                          d) C is Creditor
                                                          e) B is Acceptors
Answer: (i)-b, (ii) -e, (iii)-d

Question: Identify-
i) B/R endorsed dishonoured are debited to                    a) Bank A/C
ii) Bill honoured during the year will be debited to           b) B/P A/C
                                                                                         c) Debtors A/C
Answer: (i)-c, (ii) -b,

Question: Following is paid to whom-
i) Noting Charges                                                      a) Drawer
ii) Discounting charges on dishonour of bill              b) Drawee
iii) Interest on renewal of bill                                     c) Notary Public
                                                                                 d) Bank
Answer: (i)-c, (ii) -b, (iii)-a