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Q.1 
Date of bills Period 
1st February, 2017 2 months 
31st January, 2017 3 months 
30th September, 2017 2 months 
30th September, 2017 3 months 
29th December, 2017 2 months 
31st December, 2017 2 months 
15th July, 2017 3 months 
27th January, 2016 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + 
Period + Grace Days 
I. February 01, 
2017 
2 
months 
3 days April 04, 2017 
II. January 31, 
2017 
3 
months 
3 days May 03, 2017 
III. September 30, 
2017 
2 
months 
3 days December 03, 2017 
IV. September 30, 
2017 
3 
months 
3 days January 02, 2018 
V. December 29, 
2017 
2 
months 
3 days March 03, 2018 
VI. December 31, 
2017 
2 
months 
3 days March 03, 2018 
VII. July 15, 2017 30 days 3 days August 17, 2017 
VIII. January 27, 
2016 
1 month 3 days March 01, 2016 
Page 2


 
 
 
 
 
 
Q.1 
Date of bills Period 
1st February, 2017 2 months 
31st January, 2017 3 months 
30th September, 2017 2 months 
30th September, 2017 3 months 
29th December, 2017 2 months 
31st December, 2017 2 months 
15th July, 2017 3 months 
27th January, 2016 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + 
Period + Grace Days 
I. February 01, 
2017 
2 
months 
3 days April 04, 2017 
II. January 31, 
2017 
3 
months 
3 days May 03, 2017 
III. September 30, 
2017 
2 
months 
3 days December 03, 2017 
IV. September 30, 
2017 
3 
months 
3 days January 02, 2018 
V. December 29, 
2017 
2 
months 
3 days March 03, 2018 
VI. December 31, 
2017 
2 
months 
3 days March 03, 2018 
VII. July 15, 2017 30 days 3 days August 17, 2017 
VIII. January 27, 
2016 
1 month 3 days March 01, 2016 
 
 
 
 
 
 
Q. 2 
Date of bills Period 
29th May, 2017 4 months 
31st March, 2017 1 month 
21st July, 2017 60 days 
14th May, 2017 90 days 
28th January, 2017 1 month 
31st January, 2017 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + Period + 
Grace Days 
I. May 29, 2017 4 
months 
3 days October 01, 2017 
II. March 31, 2017 1 month 3 days May 03, 2017 
III. July 21, 2017 60 days 3 days September 23, 2017 
IV. May 14, 2017 90 days 3 days August 14, 2017 
V. January 28, 
2016 
1 month 3 days March 02, 2016 
VI. January 31, 
2016 
1 month 3 days March 03, 2016 
 
Note: 
(i) Whenever the due date is on public holiday then the due date will be the previous day. (In this bill the public 
holiday is on October 2, 2017 and August 15, 2017), 
(ii) In emergency holiday then the due date is succeeding or the next following day. (here September 22, 2017) 
 
 
 
 
Page 3


 
 
 
 
 
 
Q.1 
Date of bills Period 
1st February, 2017 2 months 
31st January, 2017 3 months 
30th September, 2017 2 months 
30th September, 2017 3 months 
29th December, 2017 2 months 
31st December, 2017 2 months 
15th July, 2017 3 months 
27th January, 2016 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + 
Period + Grace Days 
I. February 01, 
2017 
2 
months 
3 days April 04, 2017 
II. January 31, 
2017 
3 
months 
3 days May 03, 2017 
III. September 30, 
2017 
2 
months 
3 days December 03, 2017 
IV. September 30, 
2017 
3 
months 
3 days January 02, 2018 
V. December 29, 
2017 
2 
months 
3 days March 03, 2018 
VI. December 31, 
2017 
2 
months 
3 days March 03, 2018 
VII. July 15, 2017 30 days 3 days August 17, 2017 
VIII. January 27, 
2016 
1 month 3 days March 01, 2016 
 
 
 
 
 
 
Q. 2 
Date of bills Period 
29th May, 2017 4 months 
31st March, 2017 1 month 
21st July, 2017 60 days 
14th May, 2017 90 days 
28th January, 2017 1 month 
31st January, 2017 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + Period + 
Grace Days 
I. May 29, 2017 4 
months 
3 days October 01, 2017 
II. March 31, 2017 1 month 3 days May 03, 2017 
III. July 21, 2017 60 days 3 days September 23, 2017 
IV. May 14, 2017 90 days 3 days August 14, 2017 
V. January 28, 
2016 
1 month 3 days March 02, 2016 
VI. January 31, 
2016 
1 month 3 days March 03, 2016 
 
Note: 
(i) Whenever the due date is on public holiday then the due date will be the previous day. (In this bill the public 
holiday is on October 2, 2017 and August 15, 2017), 
(ii) In emergency holiday then the due date is succeeding or the next following day. (here September 22, 2017) 
 
 
 
 
 
 
 
 
 
 
Q.3 On 1st January, 2017, Ajay sold goods to Bhushan for ? 10,000. Ajay draws a bill of exchange for two 
months for the amount due which Bhushan accepts and returns it to Ajay, Bhushan met the bill on the 
due date. Pass Journal entries in the books of Ajay and Bhushan. 
 
The solution for this question is as follows: 
Journal Books of Ajay 
Date Particulars L.F. Debit ? Credit ? 
2017 
     
January 1 Bhushan Dr. 
 
10,000 
 
 
To Sales A/c 
(Sold goods to Bhushan) 
   
10,000 
January 1 Bills Receivable A/c Dr. 
 
10,000 
 
 
To Bhushan 
(Bill accepted by Bhushan) 
   
10,000 
March 4 Cash A/c Dr. 
 
10,000 
 
 
To Bills Receivable A/c 
(Bill honoured on maturity) 
   
10,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 4


 
 
 
 
 
 
Q.1 
Date of bills Period 
1st February, 2017 2 months 
31st January, 2017 3 months 
30th September, 2017 2 months 
30th September, 2017 3 months 
29th December, 2017 2 months 
31st December, 2017 2 months 
15th July, 2017 3 months 
27th January, 2016 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + 
Period + Grace Days 
I. February 01, 
2017 
2 
months 
3 days April 04, 2017 
II. January 31, 
2017 
3 
months 
3 days May 03, 2017 
III. September 30, 
2017 
2 
months 
3 days December 03, 2017 
IV. September 30, 
2017 
3 
months 
3 days January 02, 2018 
V. December 29, 
2017 
2 
months 
3 days March 03, 2018 
VI. December 31, 
2017 
2 
months 
3 days March 03, 2018 
VII. July 15, 2017 30 days 3 days August 17, 2017 
VIII. January 27, 
2016 
1 month 3 days March 01, 2016 
 
 
 
 
 
 
Q. 2 
Date of bills Period 
29th May, 2017 4 months 
31st March, 2017 1 month 
21st July, 2017 60 days 
14th May, 2017 90 days 
28th January, 2017 1 month 
31st January, 2017 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + Period + 
Grace Days 
I. May 29, 2017 4 
months 
3 days October 01, 2017 
II. March 31, 2017 1 month 3 days May 03, 2017 
III. July 21, 2017 60 days 3 days September 23, 2017 
IV. May 14, 2017 90 days 3 days August 14, 2017 
V. January 28, 
2016 
1 month 3 days March 02, 2016 
VI. January 31, 
2016 
1 month 3 days March 03, 2016 
 
Note: 
(i) Whenever the due date is on public holiday then the due date will be the previous day. (In this bill the public 
holiday is on October 2, 2017 and August 15, 2017), 
(ii) In emergency holiday then the due date is succeeding or the next following day. (here September 22, 2017) 
 
 
 
 
 
 
 
 
 
 
Q.3 On 1st January, 2017, Ajay sold goods to Bhushan for ? 10,000. Ajay draws a bill of exchange for two 
months for the amount due which Bhushan accepts and returns it to Ajay, Bhushan met the bill on the 
due date. Pass Journal entries in the books of Ajay and Bhushan. 
 
The solution for this question is as follows: 
Journal Books of Ajay 
Date Particulars L.F. Debit ? Credit ? 
2017 
     
January 1 Bhushan Dr. 
 
10,000 
 
 
To Sales A/c 
(Sold goods to Bhushan) 
   
10,000 
January 1 Bills Receivable A/c Dr. 
 
10,000 
 
 
To Bhushan 
(Bill accepted by Bhushan) 
   
10,000 
March 4 Cash A/c Dr. 
 
10,000 
 
 
To Bills Receivable A/c 
(Bill honoured on maturity) 
   
10,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Books of Bhushan 
Journal 
Date Particulars L.F. Debit ? Credit ? 
2017 
     
January 1 Purchases A/c Dr. 
 
10,000 
 
 
To Ajay 
(Goods bought from Ajay) 
   
10,000 
January 1 Ajay Dr. 
 
10,000 
 
 
To Bills Payable A/c 
(Bill drawn by Ajay, accepted) 
   
10,000 
March 4 Bills Payable A/c Dr. 
 
10,000 
 
 
To Cash A/c 
(Bill honoured on maturity) 
   
10,000 
 
Q.4 On Jan. 1,2017, Tarun purchased goods from Arun for ? 20,000 and immediately drew a promissory 
note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared 
emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the 
promissory note according to the provisions of law. 
Pass the necessary Journal entries in the books of Arun and Tarun. 
 
The solution for this question is as follows: 
 
 
 
 
 
 
 
 
 
 
 
Page 5


 
 
 
 
 
 
Q.1 
Date of bills Period 
1st February, 2017 2 months 
31st January, 2017 3 months 
30th September, 2017 2 months 
30th September, 2017 3 months 
29th December, 2017 2 months 
31st December, 2017 2 months 
15th July, 2017 3 months 
27th January, 2016 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + 
Period + Grace Days 
I. February 01, 
2017 
2 
months 
3 days April 04, 2017 
II. January 31, 
2017 
3 
months 
3 days May 03, 2017 
III. September 30, 
2017 
2 
months 
3 days December 03, 2017 
IV. September 30, 
2017 
3 
months 
3 days January 02, 2018 
V. December 29, 
2017 
2 
months 
3 days March 03, 2018 
VI. December 31, 
2017 
2 
months 
3 days March 03, 2018 
VII. July 15, 2017 30 days 3 days August 17, 2017 
VIII. January 27, 
2016 
1 month 3 days March 01, 2016 
 
 
 
 
 
 
Q. 2 
Date of bills Period 
29th May, 2017 4 months 
31st March, 2017 1 month 
21st July, 2017 60 days 
14th May, 2017 90 days 
28th January, 2017 1 month 
31st January, 2017 1 month 
 
The solution for this question is as follows: 
Sl. 
No. 
Date of Bill 
Drawn 
Period Grace 
Days 
Due Date = Date of Bill Drawn + Period + 
Grace Days 
I. May 29, 2017 4 
months 
3 days October 01, 2017 
II. March 31, 2017 1 month 3 days May 03, 2017 
III. July 21, 2017 60 days 3 days September 23, 2017 
IV. May 14, 2017 90 days 3 days August 14, 2017 
V. January 28, 
2016 
1 month 3 days March 02, 2016 
VI. January 31, 
2016 
1 month 3 days March 03, 2016 
 
Note: 
(i) Whenever the due date is on public holiday then the due date will be the previous day. (In this bill the public 
holiday is on October 2, 2017 and August 15, 2017), 
(ii) In emergency holiday then the due date is succeeding or the next following day. (here September 22, 2017) 
 
 
 
 
 
 
 
 
 
 
Q.3 On 1st January, 2017, Ajay sold goods to Bhushan for ? 10,000. Ajay draws a bill of exchange for two 
months for the amount due which Bhushan accepts and returns it to Ajay, Bhushan met the bill on the 
due date. Pass Journal entries in the books of Ajay and Bhushan. 
 
The solution for this question is as follows: 
Journal Books of Ajay 
Date Particulars L.F. Debit ? Credit ? 
2017 
     
January 1 Bhushan Dr. 
 
10,000 
 
 
To Sales A/c 
(Sold goods to Bhushan) 
   
10,000 
January 1 Bills Receivable A/c Dr. 
 
10,000 
 
 
To Bhushan 
(Bill accepted by Bhushan) 
   
10,000 
March 4 Cash A/c Dr. 
 
10,000 
 
 
To Bills Receivable A/c 
(Bill honoured on maturity) 
   
10,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Books of Bhushan 
Journal 
Date Particulars L.F. Debit ? Credit ? 
2017 
     
January 1 Purchases A/c Dr. 
 
10,000 
 
 
To Ajay 
(Goods bought from Ajay) 
   
10,000 
January 1 Ajay Dr. 
 
10,000 
 
 
To Bills Payable A/c 
(Bill drawn by Ajay, accepted) 
   
10,000 
March 4 Bills Payable A/c Dr. 
 
10,000 
 
 
To Cash A/c 
(Bill honoured on maturity) 
   
10,000 
 
Q.4 On Jan. 1,2017, Tarun purchased goods from Arun for ? 20,000 and immediately drew a promissory 
note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared 
emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the 
promissory note according to the provisions of law. 
Pass the necessary Journal entries in the books of Arun and Tarun. 
 
The solution for this question is as follows: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Journal Books of Arun 
Date Particulars L.F. Debit 
Amount 
(Rs) 
Credit 
Amount 
(Rs) 
2017 
     
January 1 Tarun Dr. 
 
20,000 
 
 
To Sales A/c 
   
20,000 
 
(Sold goods to Tarun) 
    
January 1 Bills Receivable A/c Dr. 
 
20,000 
 
 
To Tarun 
   
20,000 
 
(Promissory note accepted byTarun) 
    
February 5 Cash A/c Dr. 
 
20,000 
 
 
To Bills Receivable A/c 
   
20,000 
 
(Promissory note honoured on maturity) 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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FAQs on DK Goel Solutions: Bills of Exchange - Commerce

1. What is a Bill of Exchange and how does it function in commerce?
Ans. A Bill of Exchange is a financial instrument that is an unconditional order in writing, directing one party to pay a fixed sum of money to another party on demand or at a predetermined future date. It functions as a means of facilitating trade and credit by allowing the seller to receive payment without waiting for the buyer to pay immediately, thus enhancing liquidity and financial flexibility in commerce.
2. What are the essential features of a Bill of Exchange?
Ans. The essential features of a Bill of Exchange include: 1. It must be in writing. 2. It must be signed by the maker (the person who creates the bill). 3. It must contain an unconditional order to pay a specific amount. 4. It must state the payee (the person to whom payment is to be made). 5. It must specify the payment date or be payable on demand. 6. It must be for a definite sum of money.
3. What are the different parties involved in a Bill of Exchange?
Ans. The different parties involved in a Bill of Exchange are: 1. Drawer: The person who creates and signs the bill. 2. Drawee: The person who is ordered to pay the amount specified in the bill. 3. Payee: The person to whom the money is to be paid. 4. Endorser: A party who transfers the bill to another party by signing it. 5. Endorsee: The party who receives the bill through endorsement.
4. How is a Bill of Exchange different from a promissory note?
Ans. A Bill of Exchange differs from a promissory note in that a Bill of Exchange involves three parties (the drawer, drawee, and payee) while a promissory note involves only two parties (the maker and the payee). Additionally, a Bill of Exchange is an order to pay, whereas a promissory note is a promise to pay. Furthermore, a Bill of Exchange can be transferred to third parties, while a promissory note is typically a direct obligation of the maker to the payee.
5. What are the legal implications of dishonoring a Bill of Exchange?
Ans. The legal implications of dishonoring a Bill of Exchange include the right of the holder to take legal action against the drawer or drawee for the amount due. Dishonor can occur if the drawee refuses to pay at maturity or if the bill is not accepted. The holder may also seek damages or claim for costs incurred due to dishonor. Additionally, the drawer may be liable for any additional charges or penalties as stipulated in the terms of the bill.
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