MCQ - Bills of Exchange and Promissory Notes (Part - 6) CA Foundation Notes | EduRev

Principles and Practice of Accounting

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CA Foundation : MCQ - Bills of Exchange and Promissory Notes (Part - 6) CA Foundation Notes | EduRev

 Page 1


Bills of Exchange and 
Promissory Notes-Part 6/6 
CPT Section A Fundamentals of 
Accountancy Chapter 7 Unit 3 
CA. Ajay Lunawat 
Page 2


Bills of Exchange and 
Promissory Notes-Part 6/6 
CPT Section A Fundamentals of 
Accountancy Chapter 7 Unit 3 
CA. Ajay Lunawat 
Question No 1 
Mr. Max accepted a bill drawn by Mr. Rabin. Rabin 
endorsed the bill to Mr Shekar. On the due date, the 
bill is dishonoured as Mr Max became insolvent. To 
record the dishonour of the bill in the books of Mr. 
Rabin, which of the following accounts should be 
credited? 
Answer (c)  
(a) Mr. Max’s 
account 
(b) Bills 
Receivable 
account 
(c) Mr Shekar’s 
account 
(d) Bills 
payable 
account 
Page 3


Bills of Exchange and 
Promissory Notes-Part 6/6 
CPT Section A Fundamentals of 
Accountancy Chapter 7 Unit 3 
CA. Ajay Lunawat 
Question No 1 
Mr. Max accepted a bill drawn by Mr. Rabin. Rabin 
endorsed the bill to Mr Shekar. On the due date, the 
bill is dishonoured as Mr Max became insolvent. To 
record the dishonour of the bill in the books of Mr. 
Rabin, which of the following accounts should be 
credited? 
Answer (c)  
(a) Mr. Max’s 
account 
(b) Bills 
Receivable 
account 
(c) Mr Shekar’s 
account 
(d) Bills 
payable 
account 
Question No 2 
On 1.1.2011, X draws a bill on Y for Rs. 50,000. At 
maturity, the bill returned dishonoured as Y 
become insolvent and 40 paise per rupee is 
recovered from his estate. The amount recovered 
is: 
Answer (a)  
(a) Rs. 20,000 (b) Nil (c) Rs. 30,000  (d) 40 paise                                                
Page 4


Bills of Exchange and 
Promissory Notes-Part 6/6 
CPT Section A Fundamentals of 
Accountancy Chapter 7 Unit 3 
CA. Ajay Lunawat 
Question No 1 
Mr. Max accepted a bill drawn by Mr. Rabin. Rabin 
endorsed the bill to Mr Shekar. On the due date, the 
bill is dishonoured as Mr Max became insolvent. To 
record the dishonour of the bill in the books of Mr. 
Rabin, which of the following accounts should be 
credited? 
Answer (c)  
(a) Mr. Max’s 
account 
(b) Bills 
Receivable 
account 
(c) Mr Shekar’s 
account 
(d) Bills 
payable 
account 
Question No 2 
On 1.1.2011, X draws a bill on Y for Rs. 50,000. At 
maturity, the bill returned dishonoured as Y 
become insolvent and 40 paise per rupee is 
recovered from his estate. The amount recovered 
is: 
Answer (a)  
(a) Rs. 20,000 (b) Nil (c) Rs. 30,000  (d) 40 paise                                                
Question No 2 
On 1.1.2011 Vikas draws a bill of exchange for10,000 
due for payment after 3 months on Ekta. Ekta accepts 
to this bill of exchange. On 4.3.2011, Ekta retires the 
bill of exchange at a discount of 12% p.a. Which of the 
discount is correct for premature payment in the books 
ofEkta? 
Answer (b)  
(a) 120  
(b) 100  (c) 140  (d)160  
Page 5


Bills of Exchange and 
Promissory Notes-Part 6/6 
CPT Section A Fundamentals of 
Accountancy Chapter 7 Unit 3 
CA. Ajay Lunawat 
Question No 1 
Mr. Max accepted a bill drawn by Mr. Rabin. Rabin 
endorsed the bill to Mr Shekar. On the due date, the 
bill is dishonoured as Mr Max became insolvent. To 
record the dishonour of the bill in the books of Mr. 
Rabin, which of the following accounts should be 
credited? 
Answer (c)  
(a) Mr. Max’s 
account 
(b) Bills 
Receivable 
account 
(c) Mr Shekar’s 
account 
(d) Bills 
payable 
account 
Question No 2 
On 1.1.2011, X draws a bill on Y for Rs. 50,000. At 
maturity, the bill returned dishonoured as Y 
become insolvent and 40 paise per rupee is 
recovered from his estate. The amount recovered 
is: 
Answer (a)  
(a) Rs. 20,000 (b) Nil (c) Rs. 30,000  (d) 40 paise                                                
Question No 2 
On 1.1.2011 Vikas draws a bill of exchange for10,000 
due for payment after 3 months on Ekta. Ekta accepts 
to this bill of exchange. On 4.3.2011, Ekta retires the 
bill of exchange at a discount of 12% p.a. Which of the 
discount is correct for premature payment in the books 
ofEkta? 
Answer (b)  
(a) 120  
(b) 100  (c) 140  (d)160  
Question No 3 
Which of the following is not a foreign bill: 
Answer (D)  
(a) A bill drawn in India, on a person resident outside India 
and made payable outside India. 
(b) A bill drawn outside India, on a person resident outside 
India 
(c) A bill drawn outside India, made payable in India 
(d) A bill drawn on a person resident in India made payable in 
India 
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