Bill Exchange MCQs

1. A person who draws bill of exchange is called:
(a) Drawee
(b) Drawer
(c) Acceptor
(b) Creditor
Drawer
2. A bill of exchange is drawn by:
(a) Debtor
(c) Acceptor
(d) Holder
Creditor
3. A person on whom bill is drawn is called:
(a) Drawee
(b) Drawer
(c) Acceptor
(d) (a) & (c)
(a) & (c)
4. A person who accepts the bill of exchange is called:
(a) Holder
(c) Payee
(b) Acceptor
(d) Drawer
Acceptor
5. A bill of exchange contains of:
(a) Request
(b) Unconditional order
(c) Conditional order
(d) Promise
Unconditional order
6 Minimum number of parties in bill exchange are:
(a) Two
(c) Four
(b) Three
(d) None of these
Two
7. Bill receivable book is also called:
(a) Special journal
(b) General journal (c) Sales journal
(d) None of these
Special journal
8. Bill receivable book represents:
(a) Ledger
(b) Journal
(c) Trial balance
(d) None of these
Journal
9. When a bill is drawn the drawer credit:
(a) Debtors account
(b) Creditors account
(c) Payee account
(d) Holder account
Debtors account
10. When a bill of exchange is accepted by the drawee he debits the:
(a) Creditor account
(b) Debtor account
(c) Holder account
(d) Payee account
Creditor account
11. Bill receivable account denotes:
(a) Nominal account
(b) Real account
(c) Personal account
(d) Revenue account
Personal account
12. Bill payable account denotes:
(a) Nominal account
(b) Real account
(c) Personal account
(d) Expenses account
Personal account
13. When a bill is met at old age drawer credits:
(a) Drawee A/c
(b) Acceptor A/(c) (c) Bill receivable A/(c)
(d) Holder A/c
Bill receivable A/(c)
14. When a bill is discharged by the acceptor he debits:
(a) Bill receivable A/c
(b) Bill payable A/c
(c) Drawer Alc
(d) Creditor A/c
Bill payable A/c
15. When a drawer draws bill, the drawer debits:
(a) Bill receivable A/c
(b) Bill payable A/c
(c) Drawee A/c
(d) Cash A/c
Bill receivable A/c
16. When a person sells his bill to bank before maturity, it is called:
(a) Endorsement
(b) Discounting
(c) Retiring
(d)(b) & (c)
Discounting
17. The method of payment by bill of exchange depends on:
(a) Credit Basis
(b) Cash basis
(c) (a) and (b) (d) None of these
Credit Basis
18. Charges which are deducted by bank at the time of discounting:
(a) Discount
(b) Interest
(c) Rebate
(d) (a) & (b)
Discount
19. Drawer is a person who:
(a) Draws the bill
(b) Dishonoured the bill
(c) Accepts the bill
(d) None of these
None of these
20. The legal tenor of bill is:
(a) Sixty days
(b) One month
(c) Eighty days
(d) Ninety days
One month
21. When the drawer discounts a bill, he debits:
(a) Interest account
(b) Bank account
(c) BIR account
(d) Drawer account
Bank account
22. Bill of exchange is sent for collection to bank:
(a) Before due date
(b) At maturity date
(c) After Maturity date
(d) After ‘receiving from acceptor
After ‘receiving from acceptor
23. When acceptor of bill becomes insolvent, the bill accepted by him is measured as:
(a) Endorsed
(b) Honored
(c) Discounted
(d) Dishonored
Dishonored
24. When acceptor of bill refuses to meet bill at maturity, it is treated as:
(a) Endorsed (b) Honored
(c) Discounted
(d) Dishonored
Dishonored
25. The duration of time in which a bill payable is known as:
(a) Maturity
(b) Tenor
(c) Period of Bill (d) None of these
Tenor
26. The process through which a bill is exchange for the settlement of debts is called:
(a) Endorsement
(b) Transferring
(e) Renewal
(d) Retirement
Endorsement
27. When a bill is endorses by drawer, he debits:
(a) Debtors account
(b) Creditor account
(c) Supplier account
(d) (b) & (c)
(b) & (c)
28. The person to whom bill is endorsed called
(a) Drawee
(b) Endorsee
(c) Acceptor
(d) Transferee
Endorsee
29. When drawer sends bill for collection to bank, the drawer debits:
(a) Bank A/c
(b) Bill receivable A/c
(c) Drawee A/c
(d) Bill sent for collection A/c
Bill sent for collection A/c
30. When the bank informs the drawer for 30 collection of bill, drawer debits:
(a) Bank A/c
(b) Bank for collection A/c
(c) Bill receivable A/c
(d) None of these
31. When a bill is accepted by drawee Bank A/c without any condition it is called:
(a) Unconditional acceptance
(b) Unqualified acceptance
(c) Qualified acceptance
(d) General acceptance
Unqualified acceptance
32. When a bill is accepted by drawer with some conditions, it is called:
(a) Qualified acceptance
(b) Unqualified acceptance
(c) Conditional acceptance (d) Recommended acceptance
Qualified acceptance
33. When the drawee requests to draw another bill against interest to drawer after first bill it is called:
(a) Endorsement
(b) Discounting
(c) Renewal
(d) Dishonoring
Renewal
34. Interest on regeneration of bill is expense of:
(a) Drawer
(c) Holder
(b) Drawee
(d) Endorsee
Drawee
35. Interest on renewal of bill is Income of:
(a) Drawer
(b) Drawee
(d) Endorsee
(c) Holder
Drawer
36. If the bill is dishonored the noting charges are born by:
(a) Endorsee
(b) Drawer
(c) Drawee
(d) Bank
Drawee
37. A bill of exchange is signed by:
(b) Drawee
(a) Maker
(c) Drawer
(d) Endorser
Drawer
38. Number of grace days are :
(b) 5 days
(a) 6 days
(d) 3 days
(c) 7 days
3 days
39. The rebate in case of reticent of bill is revenue for:
(a) Holder
(b) Drawer
(c) Maker
(d) Drawee
Drawee
40 If the recognized bill is dishonored the drawer will debit:
(a) Endorsee A/c
(b) Drawee A/c
(c) Bill receivable A/c
(d) Bank A/c
Drawee A/c
41. If the reduced bill is dishonored the drawer will debit:
(a) Bank A/c
(b) Drawee A/c
(c) Bill Receivable A/c
(d) None of these
Drawee A/c
42. Retirement of bill means:
(a) Payment before maturity
(b) Payment after maturity
(c) Payment at maturity
(d) Payment after due date
Payment before maturity
43. When noting charges are paid by bank at dishonor of bill the drawer will debit:
(a) Bank account
(b) Drawee account
(c) Acceptor account
(d) Noting charges account
Drawee account
44. A bill of exchange from the view point of its drawer is called:
(a) Bill Receivable
(b) Bill payable
(c) Bill Recoverable
(d) (a) & (c)
Bill Receivable
45. A bill of exchange from the view point of debtor is called:
(a) Bill Receivable
(b) Bill payable
(c) Bill acceptable
(d) None of these
Bill payable
46. A person who promises to pay under promissory note is called:
(b) Maker
(4) Promisor
(d) (a) and (c)
(c) Promisee
Promisor
47. When liabilities of any person exceed his asset, he is called:
(a) Insolvent
(b) Defaulter
(c) Refuser
(d) Rejector
Insolvent
48. When a bill of exchange is drawn, accepted and permitted without any consideration is called:
(a) Accommodation bill
(b) General bill
(c) Common bill
(d) Unqualified bill
Accommodation bill
49. A promissory Note contains:
(a) A promise to pay
(b) Order to pay (c) Request to pay
(d) (a) and (c)
A promise to pay
50. When bill is drawn in one country and accepted and payable in another country is called:
(a) Foreign bill
(b) Local bill
(c) Inland bill
(d) Outsider’s bill
Foreign bill
51. When the bill is drawn in one country and accepted and payable in the same country is called
(a) Foreign bill (c) Inland bill
(b) Local bill
(d) Country bill
Inland bill
52. When the bill is dishonored, the container of bill goes for its noting to a person called:
(a) Notary public
(b) Oath Commissioner
(c) Lawyer
(d) Clerk
Notary public
53. How many parties involved in promissory note:
(a) Two
(b) Three
(c) Four
(d) None of these
Two
54. Promissory must not be:
(a) Written
(b) Verbal
(c) Oral
(d) Typed
Written
55. Promissory note is made by:
(b) Creditor
(a) Debtor
(c) Seller
(d) Banker
Debtor
56. When the bill is discounted by the drawer, acceptor will debit:
(a) Bill payable account
(b) Creditor account
(c) Debtor account
(d) None of these
None of these
57. What entry will be passed by acceptor in case of endorsement of bill?
(a) Same entry as debtor
(b) Same entry as endorsee
(c) No entry
(d) None of these
No entry
58. When accommodation bill dishonored drawer will credit: is
(a) Deficiency account
(b) Bank-account
(c) Drawee account
(d) Bill Receivable account
Bank-account
59. In accommodation of bill, if the drawee becomes insolvent, the drawer will credit balance of his account to:
(a) Bad debts account
(b) Deficiency account
(c) Acceptor account
(d) None of these
Bad debts account
60. Accommodation bill is drawn for:
(a) Financial assistance
(b) For receiving of debt
(c) With consideration
(d) None of these
Financial assistance
61. In accommodation bill, who draws the bill?
(a) Debtor
(b) Creditor
(c) Seller
(d) None of above
None of above
62. When a bill is drawn for accommodation of drawer and drawee, iris called:
(a) Single accommodation
(b) Dual accommodation
(c) Mutual accommodation
(d) None of these
Mutual accommodation
63. When a bill is drawn for accommodation represents: of drawer it
(a) Double accommodation
(b) Single accommodation
(c) Seller accommodation
(d) Purchaser accommodation
Single accommodation
64. Bill of exchange is governed by the Crossable Instrument Act:
(a) 1880
(b) 1881
(c) 1882
(d) 1883
1881
65. Noting charges are paid as a result of
(a) Renewal of bill
(b) Endorsement of bill
(c) Dishonor of pill
(d) Retirement of bill
Dishonor of pill
66. A bill of exchanges is:
(a) An unconditional order in writing
(b) Conditional order in writing
(c) An unconditional order verbally
(d) An unconditional promise is writing
An unconditional order in writing
67. A promissory note is:
(a) An unconditional order writing in
(b) Conditional promise in writing
(c) An unconditional, promise in writing
(d) Conditional order in writing
An unconditional, promise in writing
68. A person who receives the amount on maturity of bill is called:
(a) Drawee
(b) Payee
(c) Receiver
(d) Endorse
Payee
69. A bill of exchange is accepted by:
(a) Debtor
(b) Creditor
(c) Holder
(d) Third party
Debtor
70. Selling a bill to the bank before its due date at a discount is called bill discounting.
(a) Endorsement of bill
(b) Discounting of bill
(c) Noting of ball
(d) Collecting of bill
Discounting of bill
71. If the bill is dishonored by acceptor, drawer will debit:
(a) Acceptor account
(b) Bill payable
(c) Third party
(d) None of above
Acceptor account
72. The person who goes to Notary Public for noting of bill on dishonor is called:
(a) Drawee
(b) Acceptor
(c) Holder of bill
(d) None of these
Holder of bill
13. Noting charges are ultimately borne by
(a) Drawee
(b) Drawer
(c) Holder of bill
(d) Endorsee
Drawee
A bill of exchange which is drawn without consideration is called:
(a) Helping bill
(b) Accommodation bill
(c) Free bill
(d) None of these
Accommodation bill
5. When drawee becomes insolvent, bad debts accounts is prepared by:
(a) Drawee
(b) Drawer
(c) Acceptor
(d) Endorse
Drawee
76. When drawee becomes insolvent, deficiency account is prepared by:
(a) Drawer
(b) Endorser
(c) Notary public
(d) Drawee
Drawee
77. A person who endorsed the bill is called:
(a) Endorsee
(b) Endorser
(c) Drawee
(d) None of these
Endorser
78. If bills are sent for collection, drawer will debit:
(a) Bank for collection account
(b) Bill receivables account
(c) Bank account
(d) None of above
Bank for collection account
79 A person who notes the dishonored bill called:
(a) Oath commissioner
(b) Endorsee
(c) Notary public
(d) Endorser
Notary public
80. When a bill is discounted by endorsee, drawee will pass:
(a) Contra entry
(b) Compound entry
(c) Single entry
(d) No entry
No entry
81. When a bill is endorsed to endorsee, drawee will pass:
(a) Contra entry
(b) Compound entry
(c) Single entry
(d) No entry
No entry
82. What does retiring it bill under rebate mean?
(a) Making payment before due date
(b) Payment before due date
(c) Discounting of bill
(d) Dishonoring of bill
Payment before due date
83. How many parties are involved in case of discounting of bill?
(a) Two
(b) Three
(c) Four
(d) Five
Three
84. How many parties involved in case of endorsement of bill?
(a) Two
(b) Three
(c) Four
(d) Five
Five

Bill Exchange MCQs

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