Tag: elements of accounts

Questions Related to elements of accounts

A person on whom the bills of exchange is drawn is called as ______.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. Drawer

  2. Drawee

  3. Payee

  4. Purchaser

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Correct Option: B
Explanation:

After credit purchases the Buyer has the obligation for Repayment of his debts towards seller. When a bill is drawn by the seller for a guaranteed payment he indicates the liability of the buyer to pay the bill. Hence, the buyer becomes Drawee when bill is drawn in his name.

A firm which keeps its books of accounts on single entry system has opening balance and closing balance of Bills Receivable as Rs. 9,000 and Rs. 11,000 respectively. Bills collected during the financial period amount to Rs. 20,000. Bills receivable received during the financial period amount to.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. Rs. 22,000

  2. Rs. 18,000

  3. Rs. 12,000

  4. Rs. 11,000

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Correct Option: A

While preparing the Annual Financial Statement, the balance of Bills Receivable Account can be treated as a(n) 
1. Accrued Income
2. Item of Asset
3. Personal Account Balance
of these statements

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. 2 and 3 are correct

  2. 1 and 3 are correct

  3. 1 and 2 are correct

  4. None is correct

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Correct Option: A

When a bill is discharged, the acceptor debits ________________.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. Cash Account.

  2. Creditor's Account.

  3. Debtor's Account.

  4. Bills Payable Account.

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Correct Option: D

Which of the following is a correct statement ?

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. Bills Receivable Account is a Real Account.

  2. In order to renew a bill, the original bill need not be cancelled.

  3. At the time of endorsement of a bill, the drawee debts Bills Payable Account.

  4. When noting charges are paid by the bank at the time of dishonour of the bill, the drawee Credits Bank Account.

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Correct Option: A

A bill payable on demand is called Time bill.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. True

  2. False

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Correct Option: B
Explanation:

A draft payable at a specified future date is time draft. Bill of exchange, draft, order of payment - a document ordering the payment of money; drawn by one person or bank on another.

Bills receivable account is _____________.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. an expense account

  2. an assets account

  3. a liability account

  4. a revenue account

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Correct Option: B

Bill Payable is _________.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. Real A/c

  2. Personal A/c

  3. Nominal A/c

  4. Suspense A/c

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Correct Option: B
Explanation:

The accounts which are related to individuals, persons and firms are called personal accounts. Personal accounts are further classified into Natural Personal account, Artificial Personal Account and Representative Personal account. Bills Payable represents creditors for purchases. And every creditor is a person whether artificial or personal. Therefore, bills payable is a personal account.

The hundi payable at sight is called Darshani hundi.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. True

  2. False

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Correct Option: A
Explanation:

 A hundi payable at sight is called darshani hundi. It is negotiable and is like a demand bill. It may be sold at par or at premium or at discount. A darshani hundi should be presented for payment within a reasonable time of its receipt by the holder.

____________ is designed as a summary of information regarding a duly accepted bill received by drawer.

elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

  1. Bill Receivable Book

  2. Bill Payable Book

  3. Cash Book

  4. None

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Correct Option: A