Class 11 Accountancy - Chapter Bill of Exchange NCERT Solutions | Explain briefly the purpose and advantag
Explain briefly the purpose and advantages of maintaining of a Bills Receivable Book.
A Bills Receivable Book is designed as a summary of information regarding a duly accepted bill received by a drawer. It contains almost all the details of the bill like bill date, acceptor’s name, amount, term place of payment etc for future reference.
The advantage of preparing the Bills Receivable Book is that we get all the information at a glance. Moreover we can get an overall idea about our Debtors and keep our collection system smooth and up to date. A Bill Receivable Book contains a number of transaction related to the bills, e.g., related to bills discounted, endorsement, retirement, renewal etc.
The bills receivable book, like any other subsidiary book, is totalled periodically. This total is debited to the ‘Bills Receivable Account’ whereas the account of every individual debtor whom the bills received is credited in the ledger. The Bills Receivable Account is the account of an asset and would always have a debt balance.
More Questions From Class 11 Accountancy - Chapter Bill of Exchange
- Q:-
Fill in the blanks:
(i) A bill of exchange is a __________ instrument.
(ii) A bill of exchange is drawn by the __________ upon his __________.
(iii) A promissory note is drawn by __________ in favour of his __________.
(iv) There are __________ parties to a bill of exchange.
(v) There are __________ parties to a promissory note.
(vi) Drawer and __________ can not be the same parties in case of a bill of exchange.
(vii) Bill of exchange in India languages is called __________.
(viii) __________ days of grace are added in terms of the bill to calculate the date of its __________. - Q:-
Write ‘True’ or ‘False’ against each statement regarding a bill of exchange:
(i) A bill of exchange must be accepted by the payee.
(ii) A bill of exchange is drawn by the creditor.
(iii) A bill of exchange is drawn for all cash transaction.
(iv) A bill payable on demand is called Time bill;
(v) The person to whom payment is to be made in a bill or exchange is called payee.
(vi) A negotiable instrument does not require the signature of its maker.
(vii) The hundi Payable at sight is called Darshani hundi.
(viii) A negotiable instrument is not freely transferable.
(ix) Stamping of promissory note is not mandatory.
(x) The time of payment of a negotiable instrument need not be certain. - Q:-
Briefly explain the effects of dishonour and noting of a bill of exchange.
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Explain briefly the procedure of calculating the date of maturity of a bill of exchange? Give example.
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Briefly explain the benefits of maintaining a Bills Payable Book and state how is its posting is done in the ledger?
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Give the meaning of rebate.
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Briefly explain the purpose and benefits of retiring a bill of exchange to the debtor and the creditor.
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What is meant by maturity of a bill of exchange?
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A bill of exchange must contain “an unconditional promise to pay” Do you agree with a statement?
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Name the parties to a promissory note.
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(d) None of the above - Q:-
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The journal entry to record the sale of services on credit should include:
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(b) One debit account and more than one credit account in a entry is called compound entry.
(c) Assets sold on credit are entered in sales journal.
(d) Cash and credit purchases are entered in purchasejJournal.
(e) Cash sales are entered in sales journal.
(f) Cash book records transactions relating to receipts and payments.
(g) Ledger is a subsidiary book.
(h) Petty cash book is a book having record of big payments.
(i) Cash received is entered on the debit side of cash book.
(j) Transaction recorded both on debit and credit side of cash book is known as contra entry.
(k) Balancing of account means total of debit and credit side.
(l) Credit purchase of machine is entered in purchase journal.
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