International Commerce Olympiad

1. What account will be credited when discounted bill is dishonored?

(a) Drawee’s Account (b) Drawer’s Account

Ans: (c) Bank Account

2. Bills of exchange is a/an:

(a)Order (b) Request

Ans: (a)order

3. The person to whom the payment of bills of exchange is made is called

(a) Payee (b) Drawee

Ans: (a)payee

4. Which account is to be credited in the books of the ‘drawer’ when an endorsed Bill Receivable is dishonored?

(a)Debtor (b) Bill Receivable

Ans: (c) endorsee

5. Charges are ultimately borne by:

(a) Drawer (b) Drawee

Ans: (b)Drawee

6. Liability for a discounted bill is a

(a)Contingent Liability (b) Fixed Liability

Ans: (a)contingent Liability

7. If a bill falls on a public holiday then the bill is due on:

(a) One day after the due date (b) Public Holiday

Ans: (c) One day after the due date

8. Pravesh acceptance to Dilip for ₹ 9,000 renewed for 3 months on the condition that ₹ 4,000 be paid in cash immediately and for the remaining amount new bill will be drawn including interest @12% p.a. The amount of interest will be:

(a) ₹ 120 (b) ₹ 270

Ans: (c) ₹ 150

9. Aman draws a bill on Bimal for ₹ 60,000. Aman wants to endorse it to Chirag in settlement of ₹ 70,000 at 2% discount with the help of Bimal’s acceptance and balance in cash. How much cash Aman will pay to Bimal?

(a) ₹ 8,200 (b) ₹ 8,000

Ans: (c) ₹ 8,600

10. If a bill is drawn on 24th September 2019 for 2 months, the due date will be:

(a) 24 November, 2019 (b) 26 November, 2019

Ans: (c) 27 November, 2019

11. On 29 August, 2019, Mudit draws a bill on Paresh for one month, the due date will be

(a) 2 October, 2019 (b) 29 September, 2019

Ans: (d)1 October, 2019

12. A endorsed a bill drawn on B for ₹ 5,000 in favour of C, on the due date bill is honoured by B. Which account will be debited by B in his books?

(a)Bills Payable (b) C’s Account

Ans: (a) Bills Payable

13. If a bill is accepted and the payment is made before the due date of maturity the difference between the paid amount and the bill amount will be called as

(a) Interest (b) Discount

Ans: (c) Rebate

14. Satish draws a bill on Ashish for a sum of ₹ 10,000 payable after three months from the date of drawing of bill. Ashish gives his acceptance after adding a sentence “If my brother come back on due date” Satish claims that the bill has become invalid according to the Act.

Which feature of Bill of exchange is nullified by the Act of Ashish.

(a) It should be signed by maker (b) It should be unconditional

Ans: (b) It should be unconditional

15. On 1.6.2019 Anukriti draws a bill on Anurag for ₹ 25,000. At maturity the bill is dishonoured and ₹ 100 paid by Anukriti as noting charges. Anurag requests Anukriti to accept ₹ 5,000 in cash and for the balance Anukriti draws a bill on Anurag for 2 months with interest @ 12% p.a. What will be the amount of Interest?

(a) ₹ 410 (b) ₹ 420

Ans: (d) ₹ 402

16. Maturity date for bill written on July 1, 2016 for 90 days will be :

(a) 29th Sept. 2016 (b) 1st Oct. 2016

Ans: (b) 1st Oct. 2016

17. Ramesh’s acceptance endorsed by Kamal in favour of Shyam, dishonoured. In the books of Shyam the account debited will be of:

(a) Bills Receivable (b) Ramesh

Ans: (d)kamal

18.In case of dishonour of Bill of Exchange, noting charges are debited in the books of:

(a)Drawee (b) Payee

Ans: (a)Drawee

19. Rohan’s acceptance of ₹ 10,000 is renewed for three months including interest of 18% p.a. The journal entry in the books of drawer will be:

(a) B/R A/c Dr. 10,450

To Rohan 10,000

To Interest A/c 450

(b) B/R A/c Dr. 1,800

To Interest 1,800

To Rohan 450

(d) B/R A/c Dr. 11,800

To Rohan 10,000

To Interest 1,800

Ans: (a) B/R A/c Dr. 10,450

To Rohan 10,000

To Interest A/c 450

20. What should be the treatment, when the due date falls on a sudden holiday?

(a) The next following day is the due date

(b) The preceding business day is the due date

(d) There is no change in the due date, so payment is to be made on the same day

Ans: (a) The next following day is the due date

21. A bill is drawn by Mr. Mohan on Mr. Mahesh on 30th January 2014 for one Month, then due date of the bill is ............

(a)28th February, 2014 (b) 2nd March, 2014

Ans: (c) 3rd March, 2014

22. On 1st January, Shilpa owes ₹ 10,000 and accepts a 3 months bill for the amount. On the date of maturity Shilpa was not able to meet the bill. She pays ₹ 4,000 and asks to draw another bill for three months for the balance amount with interest @ 15% p.a. The amount of interest will be:

(a) ₹ 200 (b) ₹ 225

Ans: (b) ₹ 225

23. ‘A’ has discounted 3 months’ bill @ 10% p.a .from bank and given credit of

₹ 11,700. On due date, the bill was dishonored and noting charges of ₹ 50 was paid by bank. The amount with which A’s account will be debited by bank is ...

(a) ₹ 13,050 (b) ₹ 12,050

Ans: (b)None

24. On 12 June 2018, Gaurav drew a bill on Manish for 2 months. The due date of the bill will be:

(a)15 August 2018 (b) 12 August 2018

Ans: (d) 14 August 2018

25. A bill of ₹ 5,000 is discounted with the banker for Rs. 4,750. The bill is dishonoured at maturity. The drawee pays 60% of his acceptance. What is the amount of bad debts?

(a) ₹ 2,000 (b) ₹ 1,900

Ans: (a) ₹ 2,000

26. When a bill is endorsed in favour of third party, what journal entry will be passed at the time of maturity of the bill in the books of drawer?

(a) Debit cash account and credit bills receivable account

(b) Debit cash account and credit drawee account

(d) No entry will be passed in the books of drawer.

Ans: (d) No entry will be passed in the books of drawer.

27. The Rebate on a bill shows that the bill

(a) Has been paid after the date of maturity

(b) Has been dishonoured

(d)Has been paid before the date of maturity

Ans: (d) Has been paid before the date of maturity

28. Noting Charges are finally borne by

(a)Acceptor (b) Drawer

Ans: (a) Acceptor

29.A bill of exchange is defined as an instrument in writing containing “an conditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument “Identify the mistake in the given definition.

(a) Signed by the maker (b) Directing a certain person

Ans: (c) Conditional order

30.A issued a bill of ₹ 10,000 on B. B accepted the bill. A endorsed the bill to his creditor C in full settlement of his dues of ₹ 11,000. C got bill discounted with his bank @10% p.a. The bill was dishonoured on due date and noting charges of ₹ 200 was paid by (i) .................. and (ii) will bear

the expense of noting charges.

(a)(i)A (i) B (b) (i) Bank (ii) A

Ans: (c) (i) Bank (ii) B

31. On 12th May, 2016, Sumit issued a bill after sight of ₹ 10,000 on Raju payable after 3 months. Raju accepted the bill on 16th May, 2016. What will be the due date of the bill if August 14,2016 is Sunday?

(a) August 14, 2016 (b) August 13, 2016

Ans: (d) August 19, 2016

32. A Bill is drawn on 20-01-2016 for 60 days, after sight. Date of acceptance is 23-01-2016. The maturity date of bill will be:

(a) 23-03-2016 (b) 25-03-2016

Ans: (a) 23-03-2016

33.When noting charges are paid by the bank at the time of the dishonor of the bill, the drawee credits-

(a)Bank Account (b) Noting Charges A/c

Ans: (c) Drawer

34. Mr. Ajay draws a bill on Mr. Abhimanyu of ₹ 30,000 on 1.1.2018 for three months. On 4.2.2018, Mr. Ajay got the bill discounted at 12 % p.a. The amount of discount will be:

(a) ₹ 900 (b) ₹ 600

Ans: (b) ₹ 600

35.Fee paid in cash to notary public, when bill is dishonoured, is borne by:

(a)Drawer (b) Drawee

Ans: (b) Drawee

36. Sumit sends Sumesh’s acceptance for ₹ 15,000 to Sunil to meet his acceptance, for the like amount in favour of Sunil. What Journal Entry will be passed in the books of Sumit.

(a) Sunil Dr. 15,000

To B/R 15,000

(b) Sunil Dr. 15,000

To Sumesh 5,000

To B/R 15,000

(d) None of the above

Ans: (c) B/P Dr. 15,000

To B/R 15,000

37. A drawn a bill on B for ₹ 30,000. A endorses the bill to C in full settlement of ₹ 32,000. If the bill is dishonored on the due date and ₹ 1,000 was paid as noting charges, by what amount A will be debited in the books of C?

(a) ₹ 30,000 (b) ₹ 32,000

Ans: ( d) ₹ 33,000

38. If a bill is accepted and the payment is made before the due date of maturity, the difference between the paid amount and the bill amount will be called as

(a) Interest (b) Discount

Ans: (c) Rebate

39.Bill is drawn on 5th August, 2019, payable 60 days after sight. Date of acceptance is 10th August, 2019. What will be the due date after adding Grace Days?

(a)9th Oct 2019 (b) 12th Oct 2019

Ans: (b) 12th Oct 2019

40. On 23rd October, 2016, Rahu issued a bill after date of ₹ 10,000 on Kaal payable after 3 months. Kaal accepted the bill on 28th October, 2016. What will be the due date of the bill?

(a) 26th January, 2017 (b) 25th January, 2017

Ans: (b) 12th Oct 2019

41. The Drawee becomes on acceptance of a Bill.

(a)The drawer (b) An Acceptor

Ans; (b) An Acceptor