Refer to MCQs for Accountancy Class 11 with Answers Chapter 8 Bill of Exchange designed as per the latest syllabus issued by CBSE. All Multiple choice questions have been provided with solutions and have been prepared based on the expected pattern in upcoming board exams. MCQs Chapter 8 Bill of Exchange have been prepared by our team of best accountancy teachers

Question. Noting charges are ultimately borne by –
(a) Drawee
(b) Drawer
(c) Payee
(d) Maker

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

Question. A bill of Rs. 5,000 is discounted with the banker for RS. 4,750. The bill is dishonoured 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

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

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

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

Question. The Bills Receivable Book is a part of
(a) The Journal
(b) The Ledger
(c) The Profit
(d) None of the options

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

Question. A bill accepted and given to a creditor is called ________.
(a) Bill Payable
(b) Bill Receivable
(c) Trade bill
(d) Repair bill

Question. The act for signing by the drawer on the book of the instruments for the purpose of transfer
(a) Acceptance of bill
(b) Cheque
(c) Endorsement
(d) Bill

Question. The party who is entitled to receive the cash of a bill receivable is called
(a) Drawer
(b) Drawee
(c) Capitalist
(d) Bank

Question  A Bill of Exchange cannot be…   
(a) endorsed.
(b) crossed.
(c) accepted.
(d) None of these.

Question. Under what circumstances the drawer and the payee is the same person, with reference to a bill of exchange? 
(a) When the drawer discounts the bill with the banker
(b) When the drawer endorses the bill to a third party
(c) When the drawer holds the bill till the date of maturity
(d) When the drawee dishonour the bill

Question. Discounting Charges =
(a) Amount of Bill Discounted × Rate × Unexpired Period
(b) Amount of Bill Discounted × Rate / Unexpired Period
(c) Amount of Bill Discounted × Rate + Unexpired Period
(d) Amount of Bill Discounted + Rate × Unexpired Period

Question. Fee paid in cash to Notary Public is charged by
(a) Holder of bill of exchange
(b) Drawee
(c) Drawer
(d) None

Question. What are the parties to a bill of exchange
(a) Drawee, Drawer, Payee
(b) Drawee, Drawer, Debtor
(c) Payer, Drawee, Drawer
(d) Drawee, Drawer, Creditor

Question. Aman draws a bill on Bimal for Rs.60,000. Aman wants to endorse it to Chirag in settlement of Rs.70,000 at 2% discount with the help of Bimal’s acceptance and balance in cash. How much cash Aman will pay to Chirag?  C
(a) Rs. 8,200
(b) Rs. 8,000
(c) Rs.8,600
(d) Rs. 10,000

Question Three days are added for ascertaining the date of maturity. These are known as days of ……….   
(a) maturity.
(b) grace.
(c) payment.
(d) None of these.

Question. What account will be credited when discounted bill is dishonoured? 
(a) Drawee’s Account
(b) Drawer’s Account
(b) Bank Account
(d) Endorsee’s Account

Question. Liability for a discounted bill is a   
(a) Contingent Liability
(b) Fixed Liability
(c) Current Liability
(d) None of the above

Question. If the drawer is in need of money and cannot wait till due date and receive the money form bank is called?
(a) Endorsement of bill
(b) Discounting of bill
(c) Retirement of bill
(d) Dishonour of bill

Question. Parul accepted a bill for 90 days of Rs.10,000 drawn by Rahul on 10th February, 2010. On 18th March, 2010, Parul wished to retire the bill, Rahul offered rebate @12% p.a. Considering the year of 360 days rebate amount will be   
(a) Rs. 184
(b) Rs. 150
(c) Rs. 190
(d) None of these

Question. When an acceptor refuses to pay the amount of bill to the holder of bill on its maturity is called?
(a) Honoured bill
(b) Dishonoured bill
(c) Retired bill
(d) Endorsed bill

Question. When a drawer discounts the bill, he gets?
(a) More than face value
(b) Less than face value
(c) Equal to face value
(d) None of above

Question. Bill of Exchange has parties :
(a) 6
(b) 2
(c) 3
(d) 4

Question. On 13-07-2020 Withdraws a bill on Y for Rs.25,000 for 30 days. The due date of the bill will be : 
(a) 15th August, 2020
(b) 14th August, 2020
(c) 17th August, 2020
(d) 16th August, 2020

Question. Which account will be debited in the books of acceptor at the time of discharge of a bill? 
(α) Bills Payable Account
(b) Cash Account
(c) Drawer’s Account
(d) Endorsee’s Account

Question. Due date of a bill of exchange drawn on 30th January, 2011 for one month will be :
(a) 5 Mar
(b) 3 Mar
(c) 29 Feb
(d) 4 Mar

Question. While calculating the due date of the bill, how many days are added to the period of the bill :
(a) 4 days
(b) 3 days
(c) 5 days
(d) Neither of these

Question. X drew a bill on Y for Rs.20,000 for 3 months on 1-1-2020. The bill was discounted with banker at a charge of Rs. 100. At maturity the bill was returned dishonoured, the bank paid Rs. 100 as Noting charges. The bank account will be credited, in the books of X, for dishonour with : 
(a) Rs. 19,900
(b) Rs.20,000
(c) Rs.20,100
(d) Rs. 19,800

Question. Bill is drawn on 20th January, 2010 for 2 months. After sight date of acceptance is 29th January, 2010. The maturity date of bill will be : 
(a) 1 April, 2010
(b) 23 March, 2010
(c) 20 March, 2010
(d) 29 March, 2010

Question If due date of a bill falls on a public holiday, then the maturity date is on 
(a) one day after the maturity date.
(b) one day before the maturity date.
(c) Public holidays.
(d) None of these.

Question. If the due date of a bill falls on a public holiday then the bill is due on :   
(a) One day after the due date
(b) Public Holiday
(c) One day before the due date .
(d) None of the above

Question. A bill of exchange can not be
(a) Endorsed
(b) Accepted
(c) Refused
(d) Crossed

Question. What are the three additional days known as that a drawer gives to the drawee for payment
(a) Conditional days
(b) Additional days
(c) Days of grace
(d) Days of rebate

Question The party which is ordered to pay the amount is known as…. 
(a) drawer.
(b) payee.
(c) drawee.
(d) None of these.

Question  A Bill of Exchange is renewed generally at the request of the ….   
(a) drawer.
(b) bank.
(c) drawee.
(d) None of these.

Question A Promissory Note is made by the…   
(a) seller.
(b) purchaser.
(c) endorsee.
(d) None of these.

Question. What is retiring a bill under rebate means?
(a) Making a payment of the bill before the due date
(b) Dishonouring of a bill
(c) Making a payment of the bill after the due date
(d) All of the above

Question  In case of renewal of the bill, interest is charged for the period of 
(a) Original Bill.
(b) Fresh Bill.
(c) One Month.
(d) None of these.

Question. A bill of exchange includes.
(a) An order to pay
(b) A request to pay
(c) A promise to pay
(d) All the above

Question. If a bill is accepted and the payment is made before the due date of maturity, the difference between the paid amount and the bill amount will be called as   
(a) Interest
(b) Discount
(c) Rebate
(d) Commission

Question. Satish draws a bill on Ashish for a sum of Rs. 10,000 payable after three months from the date of drawing of bill. Ashish gives his acceptance after adding a sentence “If my brother come back on due date”. Satish claims that the bill has become invalid according to the Act. 
(a) It should be signed by maker
(b) It should be unconditional
(c) It should be in writing
(d) It should contain a certain amount

Question. On 1-6-2020 Anukriti draws a bill on Anurag for Rs.25,000. At maturity the bill is dishonoured and Rs. 100 is paid by Anukriti as noting charges. Anurag requests Anukriti to accept Rs.5,000 in cash and for the balance Anukriti draws a bill on Anurag for 2 months with interest @12% p.a. What will be the amount of Interest?   
(a) Rs.410
(b) Rs.420
(c) Rs.400
(d) Rs.402

Question A 4 months bill drawn on 1st January, 2019 will mature for payment on 
(a) 3rd May, 2019.
(b) 4th May, 2019.
(c) 5th May, 2019.
(d) 10th May, 2019

Question. Noting Charges are ultimately borne by : 
(a) Drawer
(b) Drawee
(c) Payee
(d) Bank

Question. What kind of acceptance is known as when the bill is accepted without any condition?
(a) Qualified acceptance
(b) Conditional acceptance
(c) Blank acceptance
(d) General acceptance

Question A Bill of Exchange has …. parties. 
(a) two
(b) three
(c) four.
(d) Seven.

Question A bill of Rs. 10,000 is renewed. The drawee pays Rs. 3,000 as part payment. The amount of interest charged is Rs. 200. What is the value of new bill?   
(a) Rs. 700.
(b) Rs. 10,200.
(c) Rs. 9,000.
(d) Rs. 7,200.

Question. Who draws a bill of exchange?
(a) Creditor
(b) Debtor
(c) Holder
(d) None of the above

Question. When calculating the due date of the bill how many days are added as days of grace
(a) 4
(b) 3
(c) 2
(d) 0

Question. Noting charges are to be paid to
(a) Income tax department
(b) Court
(c) Notary
(d) Company secretary

Question. Encashing the bill before the due date is called from bank
(a) Endorsement
(b) Retirement
(c) Discounting
(d) Bills sent for collection

Question. When a drawer discounts a bill, he debits?
(a) Interest account
(b) Bank account
(c) Drawee account
(d) Bill receivable account

Question. A endorsed a bill drawn on B for Rs.5,000 in favour of C. On the due date bill is honoured by B. Which account will be debited by B in his books? 
(a) Bills Payable
(b) C’s Account
(c) A’s Account
(d) Bill Receivable

Question. When a bill is dishonored, the holder of the bill goes to an official called?
(a) Notary public
(b) Manager
(c) Inspector
(d) Drawer

Question  If Ram’s acceptance which was endorsed by us in favour of Saleem is dishonoured, then the amount will be debited in our books to   
(a) Saleem.
(b) Ram.
(c) Bills Receivable Account .
(d) None of these.

Question. Interest on renewal of a bill is an expense to the?
(a) Drawer
(b) Endorsee
(c) Endorser
(d) Acceptor

Question. Which of the following is not true?
(a) There is no difference in appearance between trade and accommodation bill
(b) A bill of exchange must be accepted
(c) Drawee is maker of a bill
(d) Accommodation bill is for an imaginary transaction

Question. It is a period of time after which a bill becomes payable?
(a) Grace days
(b) Maturity
(c) Usance
(d) Tenor

Question. When a drawer discounts the bill, he gets?
(a) More than face value
(b) Less than face value
(c) Equal to face value
(d) None of above

Question. On whom the trade bill drawn
(a) Seller
(b) Creditor
(c) Debtor
(d) Owner

Question. On 29th August, 2020, Mudit draws a bill on Paresh for one month, the due date will be …….. 
(a) 2nd October, 2020
(b) 29th September, 2020
(c) 3rd October, 2020
(d) 1st October, 2020

Question. Kamal draws a bill on Sahil for Rs.3000.Kamal endorsed it to Rohan. Rohan endorsed it to Rakesh.The payee of the bill will be
(a) Kamal
(b) Rakesh
(c) Sahil
(d) Rohan

Question. If the due date is public holiday what will be the due date of the bill
(a) Preceding day
(b) Following day
(c) The same day
(d) After two days

Question  The Bills Receivable Book is part of   
(a) the Journal.
(b) the Ledger.
(c) the profit.
(d) Balance Sheet.

Question. Sohan draws a 40 days bill on Rohan on 20th January, 2010. The bill matures on   
(a) March 4, 2010
(b) February 28, 2010
(c) March 1,2010
(d) None of these

Question Noting Charges Account is debited by 
(a) Drawer. 
(b) Drawee.
(c) Payee.
(d) Endorser.

Question. According to Negotiable Instrument Act, 1881, which of the following refers to “an instrument in writing (not being a bank note or a currency note) containing unconditional undertaking, signed by the maker to pay on demand or at a fixed or determinable future time a certain sum of money only to or to the order of a certain person, or to the bearer of the instrument”?
(a) Promissory note
(b) Bearer debentures
(c) Cheque
(d) Bill of exchange

Question. Which balance is shown by a B/R Book
(a) Credit
(b) Debit
(c) Both
(d) None

Question. A draws a bill on B for Rs.30,000. A endorses it to C in settlement of Rs.35,000 at 2% discount with the help of B’s acceptance and the balance in cash. If the bill is dishonoured on the due date, by what amount will C debit A? 
(a) Rs.30,000
(b) Rs.35,000
(c) Rs.34,300
(d) Rs.30,700

Question. Bill at sight has a grace period of   
(a) 1 day
(b) 2 days
(c) 3 days
(d) None of these

Question The Rebate on a Bill shows that   
(a) it has been paid before the date of maturity.
(b) it has been paid after the date of maturity.
(c) it has been dishonoured,
(d) None of these.

Question  Rebate is calculated for the period between date of   
(a) Payment and Maturity Date.
(b) Drawing and Payment of Bill.
(c) Drawing and Maturity Date.
(d) None of these.