Tag: dishonour of bills

Questions Related to dishonour of bills

Noting charges are considered as expense by the party, who makes the payment.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. True

  2. False

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Correct Option: B
Explanation:

When a Bill of Exchange (BOE) is dishonoured, then in order to prove this fact, the drawer (or the bill holder) may get it noted and protested through a public official known as 'Notary Public' for which it charges its fees which is called Noting Charges.

Which of the following statements is true?

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. Noting charge is an expense to be borne by drawer

  2. Noting charge is an expense to be borne by drawee

  3. Noting charge is an expense to be borne by payee

  4. Noting charge is an expense to be borne by bank.

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Correct Option: B

When the bills is to be produced to notary public at the time of ___________.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. Drawing the bill

  2. Acceptance of the bill

  3. Dishonour of the bill

  4. Bills for collection

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Correct Option: C
Explanation:

If there is dishonour, or fear of dishonour, the bill will be given to a public official known as “Notary Public”. The amount of noting charges is recoverable from the party which is responsible for dishonour.

Noting Charges account is debited by _________.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. Drawer

  2. Payee

  3. Drawee

  4. Endorsee

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Correct Option: C

When an accommodation bill is discounted and the amount received is shared by the two parties, the discount is borne by the _________.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. drawee only.

  2. drawer only.

  3. drawer and drawee equally.

  4. drawer and drawee in agreed ratio.

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Correct Option: D

a bill drawn on 23.11.2013 as payable 2 months after sight was accepted on 24.11.2013. The date of maturity of this bill will be ______.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange
    1. 1 .2014
    1. 1 .2014
    1. 1 .2014

  4. None of these.

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Correct Option: C

A bill drawn on 25.11.2013 as payable 60 days after date was accepted on 26.11.2013. The date of maturity of this bill will be________.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange
    1. 1 . 2014
    1. 1. 2014
    1. 1 . 2014

  4. None of these.

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Correct Option: C

The term of a "bill after sight" commences ______.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. From the date of acceptance or presentation which ever is earlier.

  2. From the date of drawing a bill.

  3. From the date of receipt of the accepted bill.

  4. From the date of receipt of drawn bill.

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Correct Option: A
Explanation:

Option A is correct.

 "Bill after Sight" term of bill starts from the date of acceptance. When no time for payment is mentioned in the bill of exchange and the bill is payable whenever it is presented to the drawee for the payment, such bills are know as "Bill at sight" or "Bill on Demand".

When the acceptor of an instrument is also a drawer, notice of dishonour is ________________.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. Necessary(section 98A)

  2. Not necessary (Section 98(e))

  3. Not always necessary but under certain circumstances mentioned in section 98A of the Act, it is a must

  4. None of the above

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Correct Option: B

In case of dishonour of a discounted bill, noting charges are initially paid by __________.

book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

  1. drawer.

  2. drawee.

  3. banker.

  4. None of these.

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Correct Option: C