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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Name the parties to a promissory note.
- Q:-
A bill of exchange must contain “an unconditional promise to pay” Do you agree with a statement?
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Recently Viewed Questions of Class 11 Accountancy
- Q:-
A concept that a business enterprise will not be sold or liquidated in the near future is known as :
(a) Going concern
(b) Economic entity
(c) Monetary unit
(d) None of the above - Q:-
Why are the rules of debit and credit same for both liability and capital?
- Q:-
State whether the following statements are true or false:
- Depreciation is a non-cash expense.
- Depreciation is also charged on current assets.
- Depreciation is decline in the market value of tangible fixed assets.
- The main cause of depreciation is wear and tear caused by its usage.
- Depreciation must be charged so as to ascertain true profit or loss of the business.
- Depletion term is used in case of intangible assets.
- Depreciation provides fund for replacement.
- When market value of an asset is higher than book value, depreciation is not charged.
- Depreciation is charged to reduce the value of asset to its market value.
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Distinguish between a ‘ready-to-use’ and ‘tailored’ accounting software.
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Voucher is prepared from:
(i) Documentary evidence
(ii) Journal entry
(iii) Ledger account
(iv) All of the above - Q:-
Explain the double entry mechanism with an illustrative example.
- Q:-
Unfavourable bank balance means:
(a) Credit balance in passbook (b) Credit balance in cash book
(c) Debit balance in cash book (d) None of these - Q:-
What is a bank reconciliation statement. Why is it prepared?
- Q:-
State whether each of the following statements is True or False
1. Passbook is the statement of account of the customer maintained by the bank.
2. A business firm periodically prepares a bank reconciliation statement to reconcile the bank balance as per the cash book with the passbook as these two show different balances for various reasons.
3. Cheques issued but not presented for payment will reduce the balance as per the passbook.
4. Cheques deposited but not collected will result in increasing the balance of the cash book when compared to passbook.
5. Overdraft as per the passbook is less than the overdraft as per cash book when there are cheques deposited but not collected by the banker.
6. The debit balance of the bank account as per the cash book should be equal to the credit balance of the account of the business in the books of the bank.
7. Favourable bank balance as per the cash book will be less than the bank passbook balance when there are unpresented cheques for payment.
8. Direct collections received by the bank on behalf of the customers would increase the balance as per the bank passbook when compared to the balance as per the cash book.
9. When payments made by the bank as per the standing instructions of the customer, the balance in the passbook will be more when compared to the cash book. - Q:-
Choose the Correct Answer
During the life-time of an entity accounting produce financial statements in accordance with which basic accounting concept :
(a) Conservation
(b) Matching
(c) Accounting period
(d) None of the above
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