Book- Keeping and Accountancy
STANDARD XII
Chapter 7. Bills of Exchange
Page No. in book (303)
Answer in one sentence only.
1) What do you mean by bill of exchange?
Ans. A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a caertain person to pay certain sum of money only to, or the order of a contain person, or the bearer of the instrument.
2) What are days of grace?
Ans. Days of Grace. An extension of the time originally scheduled for the performance of an act, such as payment for a debt, granted merely as a gratuitous favor by the person to whom the performance is owed.
3) What do you mean by discounting a bill of exchange?
Ans. Discounting of bills refers to a facility in which holder of a bill of exchange can get the bill discounted with bank before the maturity.
4) What is noting of the bill?
Ans. When a bill (draft or promissory note) has been presented for acceptance or payment and has been dishonored a note to that effect is indorsed on the bill, after which it may be formally protested.
5) What are noting charges?
Ans. The Noting charges refers to the charges on the bills of exchange that was dishonor. Noting refers to the recording of the event in which a bill of exchange is dishonor by the noting public and it is utilized as an evidence of dishonor.
6) What is relationship between Drawer and Drawee?
Ans. The one who writes out the cheque and/or signs it is referred to as the “drawer”. The person in whose favour the cheque is “drawn” (written) is referred to as the “drawee”.
7) Who is payee of the bill?
Ans. A payee is the person to whom a check, promissory note, draft or bill is written out.
8) What do you mean by rebate?
Ans. A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed.
9) What is legal due date?
Ans. Date on which a bill of exchange (check, draft, letter of credit, etc.) is payable. No grace period may be allowed on a sight draft (due on presentation) but is allowed for a term draft (due on or before a certain date).
10) What is bills payable on demand?
Ans. Basically, a bill payable on demand refers to a bill of exchange, i.e., a written order to a person requiring them to make a specified payment to the signatory or to a named payee, which has to be paid at that moment when the creditor asks for it, after it's signed.
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