OMTEX CLASSES: Bill of Exchange HSC Maharashtra

A bill of exchange drawn and accepted for a value received.

Answer. Trade bill.

A person who draws a bill of exchange.

Answer. Drawer

A person on whom a bill of exchange is drawn.

Answer. Drawee

Payment in accordance with the apparent tenor of the bill.

Answer. Honour

Non payment in accordance with the apparent tenor of the bill.

Answer. Dishonour

Acceptance without making any change in the terms of a bill.

Answer. General acceptance

Acceptance with some changes as regards the terms of a bill.

Answer. Qualified acceptance

A bill of which payment to make on a fixed period.

Answer. After date of bill

The bill is drawn in one and payable in another country.

Answer. Foreign bill

Encashment of the bill before the due date.

Answer. Discounting

The person who transfers the ownership of the bill.

Answer. Endorser

The person in whose favour the bills transferred.

Answer. Endorsee

The three extra days which are allowed over and above the period of the bill.

Answer. Days of grace

Transfer of title of the bill from debtor to creditor.

Answer. Endorsement.

Payment of the bill before due date.

Answer. Retirement

Fees charged by the Notary public on dishonour of a bill.

Answer. Noting charges

Officer appointed by Central Government for noting dishonour of bill.

Answer. Notary public

A person who endorses a bill.

Answer. Endorser

Recording the fact of dishonour, on the bill by notary public.

Answer. Noting of bill

A person to whom the amount of bill is payable.

Answer. Payee or Drawer

A bill drawn in India and made payable in Japan or America.

Answer. Foreign bill

Writing a person’s name on the face or the back of the bill for transferring his right to another.

Answer. endorsement of the bill

The person on whose favour a bill is endorsed.

Answer. Endorsee

Bill of exchange drawn in any Indian language.

Answer. Hundies

Date on which payment of the bill is to be made.

Answer. Due date

A bill before acceptance.

Answer. Draft

Paying the bill on its due date.

Answer. Honouring of the bill

Refusal by the drawee to pay the bill on its due date.

Answer. Dishonour of the bill

Drafting a new bill on cancellation of the old bill.

Answer. Renewal of Bill of Exchange

The request by the acceptor of the bill to drawer to extend the period of credit.

Answer. Renewal of Bill of exchange

A person who accepts the bill.

Answer. Drawee or Acceptor

A person entitled to receive the amount of bill of exchange.

Answer. Payee or Drawer

BILL OF EXCHANGE

Format of the Bill of Exchange

Problem No. 1

Journalize the following transactions in the books of Maharaja.

i. Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000 endorsed to Ayub has been dishonoured, noting charges amounted to Rs. 150.

ii. Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying Rs. 400 in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months..

iii. Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month before the due date at a discount of 12%p.a.

iv. Bank informs Maharaja as to the dishonour of Kasam’s acceptance for Rs. 2000 to Maharaja discounted with Bank noting charges Rs. 200.

[Solution]

Problem No. 2

Journalise the following transactions in the book’s of Bhaskar.

i. Suresh informed Bhaskar that Nishad’s acceptance for Rs. 2500 endorsed to Suresh has been dishonoured and noting charges amounted to Rs. 25.

ii. Rajesh renews his acceptance to Bhaskar for Rs. 7500 by paying Rs. 2500 in cash and accepting a fresh bill for the balance plus interest @ 10% p.a. for three months.

iii. Mandar retired his acceptance to Bhaskar for Rs. 3,800 by paying Rs. 3750 in cash.

iv. Bhaskar sent a bill of Dayaram for Rs. 5000 to the bank for collection. But the bank informed that the bill has been dishonoured by Dayaram.

[Solution]

Problem No. 3

Journalize the following transactions in the books of Kamesh: [Ans]

i. Nanda informs Kamesh that Shanti’s acceptance for Rs. 4,000 endorsed to Nanda has been dishonoured and noting charges have been Rs. 100.

ii. Ashok renews his acceptance to Kamesh for Rs. 2400 by paying Rs. 800 in cash and accepting a new bill for the balance plus interest @ 12 p.a. for 3 months.

iii. Deva’s acceptance to Kamesh Rs. 12,000 is retired one month before its due date at a discount of 12% p.a.

iv. The bank informs Kamesh that Sudhakar’s acceptance for Rs. 4,000 has been dishonoured and it has paid noting charges of Rs. 80.

Problem no. 4

On 1st March, 2013. Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra. Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/- immediately and draw upon him a new bill for the remaining amount at 3 months together with an interest @ 10% p.a. Ramchandra agreed. The second Bill was duly honoured. Give Journal entries in the books of Ramchandra. [Ans]

Problem no. 5

Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted the bill for Rs. 10,000/- at 3 months drawn by Premlal. Premlal discounted the bill with his bank @ 6 % p.a. On due date the bill was dishonoured and Sunderlal requested Premlal to accept Rs. 4,000 immediately and draw upon him a new bill for the remaining amount at 3months together with an interest at 10% p.a. Premlal agreed and the second bill was duly honoured. Give the Journal entries in the books of Premlal. [Ans.]

Problem no. 6

Archana purchased goods from Babita on credit for Rs. 20,000. On next day Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for the balance amount for four months. Babita discounted the bill with her bank for Rs. 9600/-. Before the due date Archana approached Babita with a request to renew the Bill. Babita agreed with the condition that Archana should pay Rs. 6000 along with interest of Rs. 120 and accept a new bill for the balance. These arrangements were duly carried out. New bill is met on the due date. Pass journal entries in the books of Babita. [Ans.]

Problem no. 7

Bhagyashri sold goods to Rupa worth Rs. 24,000 to Rupa. On the next day Rupa paid Rs. 10,000 in cash and accepted 4 months bill for balance amount drawn by Bhagyashri. Bhagyashri discounted the bill at 10% p.a. after one month with her bank. On due date Rupa dishonoured her acceptance and noting charges amounted to Rs. 200. Rupa paid half the amount of the bill and full amount of noting charges. Rupa accepted a new bill at 2 months for the balance amount plus interest Rs. 100. Pass necessary journal entries in the books of Bhagyashri. [Ans.]

Problem no. 8

Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo for a period of three months. Baloo accepts and return it to Kaloo. Kaloo discounted the bill with his bank @ 12 % p.a. On due date, the bill was dishonoured noting charges amounting to Rs. 30. Kaloo then draws a bill for the balance plus interest of Rs. 170. Before the due date of this bill Baloo pays the amount at a discount of Rs. 40 to retire the bill. Pass Journal Entries in the books of Kaloo. [Ans.]

Problem No. 9.

Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On Maturity Usha finds herself unable to make payment of the bill and requested Minal to renew the bill. Minal accepts the proposal on the condition that Usha should Pay Rs. 2,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were carried through. Usha retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Minal. [Ans]

Problem No. 10

Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill and returns it to Sonia who discounts the bill with the bank at a discount of 8% p.a. Before the due date of Bill Moni requested Sonia to accept Rs. 4000 in cash and draw a bill for the balance plus interest at 12% p.a. for two months. Sonia draws a bill as the request is agreed. The bill is sent to bank for collection. On the due date the bill was honoured. Pass the necessary journal entries in the books of Sonia. [Ans]

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Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board. Latest Syllabus.

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Bill of Exchange HSC Maharashtra