CBSE Class 11 Accountancy Bills Of Exchange MCQs

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

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