Tag: bills of exchange and promissory note

Questions Related to bills of exchange and promissory note

Which of these statements is not true about a Promissory note?

book keeping and accountancy accounting for bills of exchange meaning, definition and characteristics of promissory note promissory note bills of exchange and promissory note nature, advantages and types of cheques

  1. No notice of dishonour of Promissory note is required

  2. Dishonour of Promissory note does not required noting or protest

  3. A Promissory note cannot be made payable to the maker himself

  4. Promissory note cannot be made payable to the bearer

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Correct Option: A
Explanation:
  • Notice of dishonor is a notice given by the holder of a bill of exchange or promissory note, to a drawer or indorser showing that acceptance or payment has been refused. Notice of dishonor is also known as certificate of protest or certificate of dishonor.
  • Protest for dishonour: Foreign bill of exchange must be protested for dishonour when such protest is required to be made by the law of the country where they are drawn, but no such protest is needed in the case of a promissory note.
  • A promissory note cannot be made payable the maker himself, while in a bill of exchange to the drawer and payee or drawee and payee may be same person.
  • A promissory note cannot be made payable to the bearer, no matter whether it is payable on demand or after a certain time.

Which of the following instrument cannot be made payable to the bearer?

book keeping and accountancy accounting for bills of exchange meaning, definition and characteristics of promissory note promissory note bills of exchange and promissory note nature, advantages and types of cheques

  1. Promissory note

  2. Bank cheques

  3. Bill of exchange

  4. Accommodation bill

Show answer
Correct Option: A
Explanation:
  • Promissory Note :-  The sum should be payable to a certain person. There are only two parties to a Promissory Note, one is the maker or the payer and another one is the payee. It is not transferable and thus, the amount is not payable to the bearer.
  • A cheque which is payable to any person who presents it for payment at the bank counter is called 'Bearer cheque'.
  • When a bill of exchange is payable to bearer, it means whoever holds the bill can receive the payment due on it. 
  • “ Bearer ” means the person in possession of a bill or note which is payable to bearer. 

A ____________ is a part of the voucher which is considered as a legal evidence of depositing cash or cheque into the bank account.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Acknowledgment

  2. Counterfoil

  3. Rubber stamp

  4. Folio number

Show answer
Correct Option: B
Explanation:

A pay in slip is blank form given by the bank which is duly filled by the customer to deposit cash in the bank. it has 2 part one is kept with the bank and the other is given to the customer. The smaller part which is given to the customer is known as the counter foil. It acts as the only proof that the customer has deposited money in the bank either by cheque or cash because it is stamped by the bank which acts as an acknowledgement for payment.

The pay in slips provided by the bank do not have specific denominations mentioned for particulars of cash to be deposited.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. The pay in slips provided by the bank have specific denominations mentioned for particulars of cash to be deposited. Specific denominations are given so that customer can mention the number of denominations the customer is depositing. 

Entries for cash and cheque deposits affecting bank account are passed on the basis of ____________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Withdrawal slip

  2. Pay in slip

  3. Cheque

  4. Receipt

Show answer
Correct Option: B
Explanation:

A pay in slip is a document that has 2 parts one is  counterfoil and the other longer part is kept with the bank. Pay in slips are serially numbered. It acts as a document of all the entries of deposits in the bank. All the deposit transactions are entered in the bank with the help of pay in slip. They are a proof of all the deposits.

The _____________ of a pay in slip is in the form of of the rubber stamp of the bank.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Acknowledgment

  2. Folio number

  3. Counter foil

  4. Right hand side

Show answer
Correct Option: A
Explanation:

A pay in slip has 2 parts one being a counter foil and the other longer part which is kept with the bank. The counter foil is given to the customer which is acknowledged in a form of the rubber stamp. It is a proof that the money is been given to the bank and is being acknowledged by the bank. 

Amount in the bank account can be used either using _________ or the cheques.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Pay in slip

  2. Withdrawal slip

  3. Counterfoil

  4. Receipt

Show answer
Correct Option: B
Explanation:

A bearer cheque is just like a withdrawal slip. A bearer cheque is payable over the counter. It is transferable by mere delivery. A withdrawal slip is a slip that to be filled by the customer to withdraw money from the bank account. In both the cases money can be received over the counter. Money can be withdrawn from the customer account using both a cheque and withdrawal slip.

A pay in slip is a ___________form provided by the bank to facilitate the account holders to deposit money or cheques in the account.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Filled

  2. Designed

  3. Semi-filled

  4. Blank

Show answer
Correct Option: D
Explanation:

A pay in slip is a blank document that is filled by the customer with all the details of the customer to deposit money in the bank account either by cash or by cheque filling all the details needed. 

The pay in slip of the bank requires the deposit amount to be specified in figures and words both.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

True. The pay in slip of the bank requires the deposit amount to be specified in figures and words both. The figures and words both are to be written for the clarity of the banker and to be assured the amount.

A pay in slip can be used to deposit only cash in bank account.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. A pay in slip is a document that is used to deposit money in the bank both in the form of cash as well cheque.