Revision Test 11-12 - Bill of Exchange Class 11 Notes | EduRev

Class 11 : Revision Test 11-12 - Bill of Exchange Class 11 Notes | EduRev

 Page 1


 
PUNEET COLLEGE  98155 – 00062                              1 
 
            BILLS OF 
          EXCHANGE 
 
 
 
SET – 1     23
RD
 AUG, 11    M. M. – 26    
 
 
Q 1:- What is meant by 'Noting a bill’?        2 
 
 
Q 2:- A sell goods to B for Rs. 10, 000 and draws a bill on him for the same amount for 3 months. Before 
the due date, B requests A to cancel the bill, to accept Rs. 3, 000 as part payment and to draw a fresh 
bill on him for Rs. 7, 200 for a further period of 2 months – Rs. 200 being the interest for the 
extended period. A agrees to the proposal. The new bill is duly honoured.  
 
Pass the necessary Journal entries and other party’s account in the books of both the parties.             8 
 
 
Q 3:- On 15
th
 April, 2008 A agrees to draw on B, who is his debtor for Rs. 2, 400 three bills of exchange: 
No.1  for Rs. 700 at 1 month; No. 2 for Rs. 800 at 2 months; and No. 3 for Rs. 900 at 3 months. B 
accepts and returns these bills to A. On 20
th
 April, 2008 a endorsed the first bill to his creditor C, in 
full settlement of his account for Rs. 710. He discounted the second bill on 22
nd
 April for Rs. 792. 
 
The first bill was met on maturity. The second bill was dishonoured. Rs. 10 being the noting charges. 
A agreed to draw on B a fourth bill for Rs. 825at 3 months. The thirds and fourth bills were met on 
the due dates. Record Journal entries in the books of A and B.    8 
 
 
Q 4:- On 15
th
 June, 2008, X sold to Y goods to the value of Rs. 1, 500 drawing upon the latter two bills, one 
for Rs. 1, 000 payable 2 months after date and other for Rs. 500 payable 3 months after date. X 
discounted the first bill with his bankers at 6% p.a. and endorsed the second bill in favour of his 
creditor, Z. The first bill was met on maturity but the second was dishonoured. Z paid Rs. 5 as noting 
charges. On 1
st
 October, Y cleared his account to X by paying Rs. 510 which included Rs. 5 as 
interest.  
  
Record the necessary Journal entries in the books of both X and Y.    8 
 
  
 
 
 
 
 
 
Page 2


 
PUNEET COLLEGE  98155 – 00062                              1 
 
            BILLS OF 
          EXCHANGE 
 
 
 
SET – 1     23
RD
 AUG, 11    M. M. – 26    
 
 
Q 1:- What is meant by 'Noting a bill’?        2 
 
 
Q 2:- A sell goods to B for Rs. 10, 000 and draws a bill on him for the same amount for 3 months. Before 
the due date, B requests A to cancel the bill, to accept Rs. 3, 000 as part payment and to draw a fresh 
bill on him for Rs. 7, 200 for a further period of 2 months – Rs. 200 being the interest for the 
extended period. A agrees to the proposal. The new bill is duly honoured.  
 
Pass the necessary Journal entries and other party’s account in the books of both the parties.             8 
 
 
Q 3:- On 15
th
 April, 2008 A agrees to draw on B, who is his debtor for Rs. 2, 400 three bills of exchange: 
No.1  for Rs. 700 at 1 month; No. 2 for Rs. 800 at 2 months; and No. 3 for Rs. 900 at 3 months. B 
accepts and returns these bills to A. On 20
th
 April, 2008 a endorsed the first bill to his creditor C, in 
full settlement of his account for Rs. 710. He discounted the second bill on 22
nd
 April for Rs. 792. 
 
The first bill was met on maturity. The second bill was dishonoured. Rs. 10 being the noting charges. 
A agreed to draw on B a fourth bill for Rs. 825at 3 months. The thirds and fourth bills were met on 
the due dates. Record Journal entries in the books of A and B.    8 
 
 
Q 4:- On 15
th
 June, 2008, X sold to Y goods to the value of Rs. 1, 500 drawing upon the latter two bills, one 
for Rs. 1, 000 payable 2 months after date and other for Rs. 500 payable 3 months after date. X 
discounted the first bill with his bankers at 6% p.a. and endorsed the second bill in favour of his 
creditor, Z. The first bill was met on maturity but the second was dishonoured. Z paid Rs. 5 as noting 
charges. On 1
st
 October, Y cleared his account to X by paying Rs. 510 which included Rs. 5 as 
interest.  
  
Record the necessary Journal entries in the books of both X and Y.    8 
 
  
 
 
 
 
 
 
 
PUNEET COLLEGE  98155 – 00062                              2 
 
            BILLS OF 
          EXCHANGE 
 
 
 
SET – 2     23
RD
 AUG, 11    M. M. – 26   
 
 
Q 1:- What is meant by ‘Renewal of a bill’?       2 
 
 
Q 2:- On 1
st
 October, 2007, X sells goods to Y for Rs. 25, 000 and draws two bills of exchange on him; the 
first for Rs. 10, 000 for 2 months and second for Rs. 15, 000 for 3 months. Y accepts and returns 
these bills to X. Both the bills are sent to the bank for collection. In due course, X receives the 
information from the bank that the bill for Rs. 10, 000 has been duly met and the other bill for       
Rs. 15, 000 has been dishonoured. Noting charges paid on the dishonour of the second bill are         
Rs. 100. 
  
Pass Journal entries in the books of X.       8 
 
 
Q 3:- Ashok draws on Brij three bills of exchange for Rs. 5, 000, Rs. 4, 000 and Rs. 3, 000 respectively for 
goods sold to him on 1
st
 February, 2008. These bills were for one month, two months and three 
months respectively. The first bill was endorsed to his creditor Chand. The second bill was 
discounted with his bank on 4
th
 February, 2008 @ 12% discount and the third bill was sent to his 
bank for collection on 30
th
 April. On the due dates all the bills were duly met by Brij. The bank sent 
the collection advice for the third bill after deducting Rs. 25 as collection charges. 
 
 Pass journal entries in the books of Ashok and Brij.     8 
 
 
Q 4:-  On 1
st
 May, 2008, Merchant and Co. sold goods to A. B. and Co. goods valued at Rs. 500 and drew 
upon them a bill at 3 months for the amount. A. B. and Co. accepted the draft on presentation. When 
the bill was about to mature. A. B and Co. expressed their inability to meet it, and offered to pay 
Merchant and Co. Rs. 200 in cash and to accept a fresh bill for the balance plus interest at 6% p.a. 
for 3 months. Merchant and Co. agreed to the proposal and bill was renewed. On maturity, the bill 
was duly met. 
 
Make entries in the books of both parties to record the above transactions.   8 
 
 
 
 
 
 
Page 3


 
PUNEET COLLEGE  98155 – 00062                              1 
 
            BILLS OF 
          EXCHANGE 
 
 
 
SET – 1     23
RD
 AUG, 11    M. M. – 26    
 
 
Q 1:- What is meant by 'Noting a bill’?        2 
 
 
Q 2:- A sell goods to B for Rs. 10, 000 and draws a bill on him for the same amount for 3 months. Before 
the due date, B requests A to cancel the bill, to accept Rs. 3, 000 as part payment and to draw a fresh 
bill on him for Rs. 7, 200 for a further period of 2 months – Rs. 200 being the interest for the 
extended period. A agrees to the proposal. The new bill is duly honoured.  
 
Pass the necessary Journal entries and other party’s account in the books of both the parties.             8 
 
 
Q 3:- On 15
th
 April, 2008 A agrees to draw on B, who is his debtor for Rs. 2, 400 three bills of exchange: 
No.1  for Rs. 700 at 1 month; No. 2 for Rs. 800 at 2 months; and No. 3 for Rs. 900 at 3 months. B 
accepts and returns these bills to A. On 20
th
 April, 2008 a endorsed the first bill to his creditor C, in 
full settlement of his account for Rs. 710. He discounted the second bill on 22
nd
 April for Rs. 792. 
 
The first bill was met on maturity. The second bill was dishonoured. Rs. 10 being the noting charges. 
A agreed to draw on B a fourth bill for Rs. 825at 3 months. The thirds and fourth bills were met on 
the due dates. Record Journal entries in the books of A and B.    8 
 
 
Q 4:- On 15
th
 June, 2008, X sold to Y goods to the value of Rs. 1, 500 drawing upon the latter two bills, one 
for Rs. 1, 000 payable 2 months after date and other for Rs. 500 payable 3 months after date. X 
discounted the first bill with his bankers at 6% p.a. and endorsed the second bill in favour of his 
creditor, Z. The first bill was met on maturity but the second was dishonoured. Z paid Rs. 5 as noting 
charges. On 1
st
 October, Y cleared his account to X by paying Rs. 510 which included Rs. 5 as 
interest.  
  
Record the necessary Journal entries in the books of both X and Y.    8 
 
  
 
 
 
 
 
 
 
PUNEET COLLEGE  98155 – 00062                              2 
 
            BILLS OF 
          EXCHANGE 
 
 
 
SET – 2     23
RD
 AUG, 11    M. M. – 26   
 
 
Q 1:- What is meant by ‘Renewal of a bill’?       2 
 
 
Q 2:- On 1
st
 October, 2007, X sells goods to Y for Rs. 25, 000 and draws two bills of exchange on him; the 
first for Rs. 10, 000 for 2 months and second for Rs. 15, 000 for 3 months. Y accepts and returns 
these bills to X. Both the bills are sent to the bank for collection. In due course, X receives the 
information from the bank that the bill for Rs. 10, 000 has been duly met and the other bill for       
Rs. 15, 000 has been dishonoured. Noting charges paid on the dishonour of the second bill are         
Rs. 100. 
  
Pass Journal entries in the books of X.       8 
 
 
Q 3:- Ashok draws on Brij three bills of exchange for Rs. 5, 000, Rs. 4, 000 and Rs. 3, 000 respectively for 
goods sold to him on 1
st
 February, 2008. These bills were for one month, two months and three 
months respectively. The first bill was endorsed to his creditor Chand. The second bill was 
discounted with his bank on 4
th
 February, 2008 @ 12% discount and the third bill was sent to his 
bank for collection on 30
th
 April. On the due dates all the bills were duly met by Brij. The bank sent 
the collection advice for the third bill after deducting Rs. 25 as collection charges. 
 
 Pass journal entries in the books of Ashok and Brij.     8 
 
 
Q 4:-  On 1
st
 May, 2008, Merchant and Co. sold goods to A. B. and Co. goods valued at Rs. 500 and drew 
upon them a bill at 3 months for the amount. A. B. and Co. accepted the draft on presentation. When 
the bill was about to mature. A. B and Co. expressed their inability to meet it, and offered to pay 
Merchant and Co. Rs. 200 in cash and to accept a fresh bill for the balance plus interest at 6% p.a. 
for 3 months. Merchant and Co. agreed to the proposal and bill was renewed. On maturity, the bill 
was duly met. 
 
Make entries in the books of both parties to record the above transactions.   8 
 
 
 
 
 
 
 
PUNEET COLLEGE  98155 – 00062                              3 
 
            BILLS OF 
          EXCHANGE 
 
 
 
SET – 3     23
RD
 AUG, 11    M. M. – 26    
 
 
Q 1:- What is meant by ‘dishonour of a bill’?       2 
 
 
Q 2:- On January 15, 2006 Sachin sold goods for Rs. 30, 000 to Narain and drew upon later a bill for the 
same amount payable after 3 months. The bill was accepted by Narain. The bill was discounted by 
Sachin from his bank for Rs. 29, 250 on January 31, 2006. On maturity the bill was dishonoured. He 
further agreed to pay Rs. 10, 500 in cash including Rs. 500 interest and accept a new bill for two 
months for the remaining Rs. 20, 000. The new bill was endorsed by Sachin in favour of his creditor 
Kapil for debt of Rs. 20, 000. The new bill was duly met by Narain on maturity.  
 
Give Journal entries in the books of Sachin.      8 
 
 
Q 3:- On 15
th
 January, 2008 Sudershan sold goods to Shashi for Rs. 3, 000. Shashi paid Rs. 600 in cash and 
for balance accepts three bills – No. 1 for Rs. 700 at 1 month, No. 2 for Rs. 800 at 2 months, and No. 3 
for Rs. 900 at 3 months. 
 
Sudarshan endorsed 1
st
 bill to Nahar, his creditor, on 16
th
 January in full settlement of Rs. 710, 
discounted the 2
nd
 bill at his bank for Rs. 792 and retained the third bill till maturity. The first bill is 
met at maturity. The second bill is dishonoured and Rs. 10 being paid as noting charges. Sudarshan 
charges Rs. 15 for interest and draws on Shashi a fourth Bill for the amount at 3 months. At maturity 
the third bill was renewed with interest of 5% p.a. for 3 months. The fifth bill was duly accepted by 
Shashi. The fourth and fifth bills were met on maturity.  
 
Give journal entries in the books of Sudarshan and Shashi.     8 
 
Q 4:- Amar sells goods to Bhola for Rs. 10, 000 and draws upon him a bill for the amount payable 3 
months after date. The bills are accepted by Bhola. Amar discounts the bill with his bankers at a 
discount of Rs. 150 inclusive of all charges. Bhola fails to meet this meet this bill on maturity. Amar 
pays off his bankers and his expenses amount to Rs. 100. Bhola gives a fresh bill, 2 months’ date to 
Amar for Rs. 10, 250, which he met at maturity.  
 
 Show the necessary Journal entries in Amar’s books.     8 
 
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