CBSE Class 11 Accountancy Accounting For Bills Of Exchange Worksheet

Question. A Bill of Exchange is renewed generally at the request of the ....
(a) drawer.
(b) bank.
(c) drawee.
(d) None of these. 

Answer :  C

Question.  A Promissory Note is made by the...
(a) seller.
(b) purchaser.
(c) endorsee.
(d) None of these. 

Answer :  B 

Question.  Aman draws a bill on Bimal for Rs.60,000. Aman wants to endorse it to Chirag in settlement of Rs.70,000 at 2% discount with the help of Bimal’s acceptance and balance in cash. How much cash Aman will pay to Chirag?
(a) Rs. 8,200
(b) Rs. 8,000
(c) Rs.8,600
(d) Rs. 10,000 

Answer :  C

Question. What account will be credited when discounted bill is dishonoured?
(a) Drawee’s Account
(b) Drawer’s Account
(b) Bank Account
(d) Endorsee’s Account 

Answer :  C 

Question. Rebate is calculated for the period between date of
(a) Payment and Maturity Date.
(b) Drawing and Payment of Bill.
(c) Drawing and Maturity Date.
(d) None of these. 

Answer :  A

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. Noting Charges are ultimately borne by :
(a) Drawer
(b) Drawee
(c) Payee
(d) Bank 

Answer :  B

Question. Liability for a discounted bill is a
(a) Contingent Liability
(b) Fixed Liability
(c) Current Liability
(d) None of the above 

Answer :  A

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 above 

Answer :  C

Question. Which account will be debited in the books of acceptor at the time of discharge of a bill?
(α) Bills Payable Account
(b) Cash Account
(c) Drawer’s Account
(d) Endorsee’s Account 

Answer :  A

Question. On 13-07-2020 Withdraws a bill on Y for Rs.25,000 for 30 days. The due date of the bill will be :
(a) 15th August, 2020
(b) 14th August, 2020
(c) 17th August, 2020
(d) 16th August, 2020 

Answer :  B

Question. Under what circumstances the drawer and the payee is the same person, with reference to a bill of exchange?
(a) When the drawer discounts the bill with the banker
(b) When the drawer endorses the bill to a third party
(c) When the drawer holds the bill till the date of maturity
(d) When the drawee dishonour the bill 

Answer :  C

Question. On 29th August, 2020, Mudit draws a bill on Paresh for one month, the due date will be ……..
(a) 2nd October, 2020
(b) 29th September, 2020
(c) 3rd October, 2020
(d) 1st October, 2020 

Answer :  D

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. Satish draws a bill on Ashish for a sum of Rs. 10,000 payable after three months from the date of drawing of bill. Ashish gives his acceptance after adding a sentence “If my brother come back on due date”. Satish claims that the bill has become invalid according to the Act.
(a) It should be signed by maker
(b) It should be unconditional
(c) It should be in writing
(d) It should contain a certain amount 

Answer :  B

Question. Parul accepted a bill for 90 days of Rs.10,000 drawn by Rahul on 10th February, 2010. On 18th March, 2010, Parul wished to retire the bill, Rahul offered rebate @12% p.a. Considering the year of 360 days rebate amount will be
(a) Rs. 184
(b) Rs. 150
(c) Rs. 190
(d) None of these 

Answer :  C 

Question. A 4 months bill drawn on 1st January, 2019 will mature for payment on
(a) 3rd May, 2019.
(b) 4th May, 2019.
(c) 5th May, 2019.
(d) 10th May, 2019 

Answer :  B

Question.  Liability for a discounted bill is a
(a) Contingent Liability
(b) Fixed Liability
(c) Current Liability
(d) None of the above
Answer :  B

Question. What account will be credited when discounted bill is dishonoured?
1. Drawer’s Account
2. Drawee’s Account
3. Endorsee’s Account
4. Bank Account
Answer: Bank Account

Question. On a public holiday, the due date of a bill will be due on. 1. One day after the due date 2. Public holiday 3. One day before the due date 4. None of the above Answer: One day before the due date Question 14 Bill of exchange is a conditional order to pay
Answer : False

Question. Bill of exchange is a conditional order to pay
Answer : False

Very Short Answer Type Questions

Question. What is the bill of exchange
Answer : Bill of exchange is a written document signed by the head of the department or the makers guiding them to pay a certain amount for the order of a certain individual or the bearer of the device.

Question. Is bill of exchange drawn by the debtor?
Answer : No, the bill of exchange is not drawn by a debtor

Question. What is the date of maturity of a bill of exchange?
Answer : The date of maturity of a bill of exchange is the date on which the bill becomes due for payment.

Question. What is nothing of the bill of exchange?
Answer : The dishonor of the bill by the public is referred to as nothing of the bill of exchange.

Question. Sohan draws a 40 days bill on Rohan on 20th January, 2010. The bill matures on
(a) March 4, 2010
(b) February 28, 2010
(c) March 1,2010
(d) None of these

Answer :  A

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. If a bill is accepted and the payment is made before the due date of maturity, the difference between the paid amount and the bill amount will be called as
(a) Interest
(b) Discount
(c) Rebate
(d) Commission

Answer :  C

Question. A draws a bill on B for Rs.30,000. A endorses it to C in settlement of Rs.35,000 at 2% discount with the help of B’s acceptance and the balance in cash. If the bill is dishonoured on the due date, by what amount will C debit A?
(a) Rs.30,000
(b) Rs.35,000
(c) Rs.34,300
(d) Rs.30,700

Answer :  D

Question Noting Charges Account is debited by
(a) Drawer.
(b) Drawee.
(c) Payee.
(d) Endorser.

Answer :  B

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 these.

Answer :  B

Question. Bill at sight has a grace period of
(a) 1 day
(b) 2 days
(c) 3 days
(d) None of these

Answer :  D

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

Answer :  B

Question The party which is ordered to pay the amount is known as....
(a) drawer.
(b) payee.
(c) drawee.
(d) None of these.

Answer :  C

Question Three days are added for ascertaining the date of maturity. These are known as days of ..........
(a) maturity.
(b) grace.
(c) payment.
(d) None of these.

Answer :  B

Question A Bill of Exchange cannot be...
(a) endorsed.
(b) crossed.
(c) accepted.
(d) None of these.

Answer :  B

Question. On 1-6-2020 Anukriti draws a bill on Anurag for Rs.25,000. At maturity the bill is dishonoured and Rs. 100 is paid by Anukriti as noting charges. Anurag requests Anukriti to accept Rs.5,000 in cash and for the balance Anukriti draws a bill on Anurag for 2 months with interest @12% p.a. What will be the amount of Interest?
(a) Rs.410
(b) Rs.420
(c) Rs.400
(d) Rs.402

Answer :  D

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 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 these.

Answer :  B

Question The Bills Receivable Book is part of
(a) the Journal.
(b) the Ledger.
(c) the profit.
(d) Balance Sheet.

Answer :  A

Question The Rebate on a Bill shows that
(a) it has been paid before the date of maturity.
(b) it has been paid after the date of maturity.
(c) it has been dishonoured,
(d) None of these.

Answer :  A

Question In case of renewal of the bill, interest is charged for the period of
(a) Original Bill.
(b) Fresh Bill.
(c) One Month.
(d) None of these.

Answer :  B

Question. On a public holiday, the due date of a bill will be due on. 1. One day after the due date 2. Public holiday 3. One day before the due date 4. None of the above Answer: One day before the due date Question 14 Bill of exchange is a conditional order to pay
Answer : False

CBSE Class 11 Accountancy Chapter 8 Bill of Exchange Fill In The Blanks

Question. A charge collected by the bank on dishonoured bill is known as………….
Answer. Noting Charge

Question. Bills of exchange are governed by………………… act
Answer. Negotiable instrument act 1881

Question. Drawer is the……………….of bills of exchange.
Answer. Maker

Question. Liability to pay Noting Charges is taken by….…
Answer. Drawee

Question. Bill payable on demand is called ……..
Answer. Time bill

Question. ………….include Creditors and Bills Payables.
Answer. Trade Payables

Question. Drawee may have to pay …….to drawer for the extended period
Answer. Interest

Question. Discount offered by the holder of bill to get payment prior to maturity date is known as……?
Answer. Rebate

CBSE Class 11 Accountancy Chapter 8 Bill of Exchange True and False

1. A person who draws the bill is called drawee.False
2. A charge collected by bank on dishonoured is known as rebate.False
3. Drawee may have to pay interest to the drawer for the extended period of credit.True
4. A bill of exchange must be accepted by the payee.True
5. A bill payable on demand is called bill at sight.False
6. Negotiable instrument Act 1981 govern the transactions of bill of exchange. False
7. Bill of exchange may be in oral or written form. False
8. Maturity date of a particular bill is 27th September and on that date strike on such state. So due date will be 28 September of next working day. True
9. This entry is passed in the book of acceptor on dishonoured of bill. True

CBSE Class 11 Accountancy Chapter 8 Bill of Exchange MCQs

Question. In which Act a bill of exchange is defined as an “Negotiable Instrument”
a. Negotiable Instrument Act 1881
b. Negotiable Instrument Act 1932
c. Negotiable Instrument Act 1956
d. Negotiable Instrument Act 1856
Answer. (A)

Question. A bill of exchange is order to Make payment by
a. Conditional
b. Unconditional
c. A & B both
d. None of the Above
Answer. (B)

Question. A Bill of exchange is generally drawn by
a. Seller
b. Buyer
c. Customer
d. None of the Above
Answer. (A)

Question. A bill of exchange must be accepted by
a. Drawer
b. Drawee
c. Payee
d. Holder of bill
Answer. (B)

Question. A bill payable on demand is called
a. Time Bill
b. Sight Bill
c. Endorsement of bill
d. Retiring of the bill
Answer. (B)

Question. If Drawee paid the bill before maturity is known
a. Renewal of a bill
b. Dishonour of a bill
c. Retirement of a bill
d. Endorsement of a bill
Answer. (C)

Question. If Drawer transfer the bill before maturity date is known
a. Renewal of a bill
b. Dishonour of a bill
c. Retirement of a bill
d. Endorsement of a bill
Answer. (D)

Question. If on due date Drawee unable to pay bill
a. Renewal of a bill
b. Dishonour of a bill
c. Retirement of a bill
d. Endorsement of a bill
Answer. (B)

Question. Noting charges are borne by
a. Drawee
b. Drawer
c. Holder of bill
d. Notary Public
Answer. (A)

Question. Noting charges are paid by
a. Drawee
b. Drawer
c. Holder of bill
d. Notary Public
Answer. (C)

Question. Who is Payee of the bill on Due date of bill
a. Drawee
b. Drawer
c. Holder of bill
d. Notary Public
Answer. (C)

Question. Bill at sight has a grace period of
a. One day
b. Two days
c. Three days
d. None of the above
Answer. (D)

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. Days of grace will be added to ascertain the due date of term bill
a. One day
b. Two days
c. Three days
d. None of the above
Answer. (C)

CBSE Class 11 Accountancy Chapter 8 Bill of Exchange Match The Following

Question. Identify the correct one –
Ram is a drawee to Ramesh for Rs. 10000 he-
i) is unable to pay on maturity date       a) Discounted the bill
ii) has paid before the maturity date      b) Renewal of bill
                                                               c) Rebate on bill
Answer. B & C

Question. Identify the correct one-
A drew four bills on B respectively on 31st January, 28thFeburary, 31st March and 30th April, but all are payable after one month. What will be the correct due dates-
i) 3rd March      a) i,ii, iii, iv
ii) 3rd April        b) ii, iv, i, iii
iii)3rd May        c) iii, i, iv, ii
iv) 3rdJune       d) iv, iii, ii, i
Answer. A

Question. Identify-
i) On dishonour of bill the entry in the books of            a) Dr. Debtors a/c and Cr. B/R a/c
drawee is
ii) On dishonour of bill the entry in the books of           b) Dr.Bank a/c and Cr. B/P a/c
holder of bill (endorsee)
                                                                                     c) Dr. Debtors a/c and Cr. B/P a/c
Answer. C & A

Question. Identify-
i) Sold goods to Ram Rs 5000 at 10% trade           a) Rs 4,550
discount and 2%
cash discount, a bill is drawn for one month
for the same. The
final amount of bill will be
ii) Bill of Rs 5000 receivable after two months        b) Rs 4,500
discounted
@6% p.a., after discounting bank will pay
                                                                                c) Rs 4,410
Answer. B & A

Question. idenify-
i) A bill was drawn on 12thjune for two months              a) 15th August
then the
maturity will be
ii) A bill was drawn on 21st august for one month,          b) 26th September
if maturity
date is Sunday, then the due date will be  
                                                                                        c) 14th August
                                                                                        d) 24th September
Answer. C & D

Question. Identify-
i) Which a/c is debited for recording of noting charges                    a) Drawer a/c
ii) Which a/c is credited for the balance amount if goods are           b) Accepter’s a/c
purchased and half amount is paid by cheque and for half we
gave our acceptance
                                                                                                          c) Bills Payable a/c
Answer. B & C

Question. Identify-
i) Sales are calculated by adding                      a) cash sales and received from debtors
ii) From incomplete records it is possible to      b) cash sales + credit sales
prepare
                                                                          c) Ledger account
                                                                          d) Statement of affairs
Answer. B & D

Question. Identify-
i) Bill accept by drawee can transferred to                               a) Endorsee
ii) The amount of bill dishonoured will be ultimately paid by    b) Bank
                                                                                                 c) Drawee
Answer. A & C

Very Short Answer Type Question

Question. Nothing charges are borne by
1. Drawer
2. Drawee
3. Payee
4. Bank
Answer : Drawee

Question. What are the two most used negotiable instrument
Answer : The two most used negotiable instrument is.
• Bill of exchange
• Promissory Note

Question. Explain the characteristics of the bill of exchange
Answer : The characteristics of the bill of exchange are.
• A bill of exchange should be in writing
• The order must be unconditional
• The date of payment must be a fixed date
• It should be signed by the drawee of the bill
• It should be signed by the drawer of the bill

Question. Does promissory note require acceptance?
Answer : No, the promissory note does not require acceptance as it is already a valuable device.

Question. What is the date of maturity of a bill of exchange? Calculate the due date of a bill of exchange written on July 13, 2017, for 30 days.
Answer : The date of maturity will be August 14, 2017.

Question. What is a bill called draft?
Answer : Before its acceptance.