Tag: bills of exchange

Questions Related to bills of exchange

__________ of the bill occurs when drawee has funds at disposal and makes a request to drawer or holder to accept the payment before its due date.

  1. Retirement

  2. Renewal

  3. Discounting

  4. Honoring


Correct Option: A

A bill of Rs. 5000 is being renewed for next 3 month with interest @ 12 % p.a
ascertain the Interest Amount __________.

  1. 100

  2. 175

  3. 150

  4. 155


Correct Option: C

When bill is cancelled Drawee passes Following Entry ______________.

  1. Bill Payable A/c Dr

    To Drawer A/c

  2. Bill Payable A/c Dr

    To Cash A/c

  3. Drawer A/c Dr

    To Bill Payable A/c

  4. None


Correct Option: A

\Discount at the time of retirement of a Bill is a gain for the drawee.

  1. True

  2. False


Correct Option: A

If the drawee pay the bill before its maturity date it is called ___________.

  1. retirement

  2. pre-payment

  3. postponement

  4. dishonor


Correct Option: A

At the time of renewal of a bill, interest account is in the books of the drawer. 

  1. Credited

  2. Debited

  3. None of these

  4. Both (a) and (b)


Correct Option: A

Retiring or outgoing partner:

  1. To be liable for firms liabilities.

  2. Not liable for any liabilities of the firm.

  3. Is liable for obligation incurred before his retirement.

  4. Is liable for obligations incurred with his consent only.


Correct Option: C

When bill is retired , What will be the entry in the books of Drawee ?

  1. Bill payable A/c Dr

    To Cash A/c

    To Discount A/c

  2. Bill payable A/c Dr

    To Cash A/c

    To Rebate A/c

  3. No Entry

  4. None of the Above


Correct Option: B

Rebate is calculated for __________ time before the due date.

  1. unexpired

  2. expired

  3. future

  4. none


Correct Option: A

Discount allowed by the holder of the bill to encourage retirement is called _____.

  1. discount

  2. rebate

  3. both

  4. none


Correct Option: B