Test: Bill Of Exchange - 1 | 10 Questions MCQ Test

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This mock test of Test: Bill Of Exchange - 1 for Commerce helps you for every Commerce entrance exam. This contains 10 Multiple Choice Questions for Commerce Test: Bill Of Exchange - 1 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Bill Of Exchange - 1 quiz give you a good mix of easy questions and tough questions. Commerce students definitely take this Test: Bill Of Exchange - 1 exercise for a better result in the exam. You can find other Test: Bill Of Exchange - 1 extra questions, long questions & short questions for Commerce on EduRev as well by searching above.

QUESTION: 1

Q. Bill of Exchange has parties :

A.
6
B.
2
C.
3
D.
4

Solution:

A bill of exchange consist of three parties namely:
i) Drawer
ii) Drawee
iii) Payee.

QUESTION: 2

The party which is ordered to pay the amount of bill of exchange is called :

A.
Drawee
B.
Payee
C.
Drawer
D.
None of these

Solution:

The party upon whom the bill is drawn is called the drawee. He is the person to whom the bill is addressed and who is ordered to pay. He becomes an acceptor when he indicates his willingness to pay the bill.

QUESTION: 3

The party which is entitled to receive the payment of bill of exchange is known as :

A.
Drawer
B.
Payee
C.
Drawee
D.
None of these

Solution:

A person to whom money is paid or is to be paid, especially the person to whom a cheque is made payable. A payee is a party in an exchange who receives payment. The payee is paid by cash, check, or another transfer medium by a payer.
The drawee is the party that pays the sum specified by the bill of exchange
The drawer is the party that obliges the drawee to pay the payee. The drawer and the payee are the same entity unless the drawer transfers the bill of exchange to a third-party payee.

So, payee is the correct option.

QUESTION: 4

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

Solution:

Due date of a bill is only after the given period (in this case one month ) plus three days of grace . So the bill will be paid only after 1 month and 3 days i.e. on 3rd march.

QUESTION: 5

The promissory note should be signed by

A.
Payee
B.
Drawee
C.
Drawer
D.
Promiser

Solution:

Promissory Notes: A negotiable instrument is a document in writing. It is signed by a certain person who promises to pay another person a fixed sum of money on a fixed date.

QUESTION: 6

On dishonor of a discounted bill who does the bank look for payment?

A.
Drawer
B.
Payee
C.
Endorser
D.
None

Solution:

Drawer (the person who had received B/R) because he had discounted the bill from the bank and now he's liable for it's dishonour. But later he can claim this amount from drawee.

QUESTION: 7

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

Solution:

3 days of grace are added to the period of bill while calculating the due date of the bill.

QUESTION: 8

Encashing the bill before the date of its maturity is called :

A.
Dishonour of Bill
B.
Retirement of Bill
C.
Discounting of Bill
D.
Endorsement of Bill

Solution:

When we encash a bill before it's maturity, it's generally discounted with bank, bank charges some discounting charges and thus the process is known as discounting of bill.

QUESTION: 9

A bill of exchange renewed generally at the request of

A.
Drawee
B.
Bank
C.
Drawer
D.
None

Solution:

When drawer want their money and drawee is not in the position to pay his money, then he wants some time to pay his money and so he requests to make a new bill to drawer.

QUESTION: 10

A bill of exchange can not be

A.
Endorsed
B.
Accepted
C.
Refused
D.
Crossed

Solution:

A bill of exchange is a document used in transactions that orders the payer to pay a certain amount of money to the payee. It is a guarantee of payment on demand or on a specified date, and it cannot be refused or cancelled, like a check.