Home
Class 11
ACCOUNTS
Bill of exchange as an Instrument : A bi...

Bill of exchange as an Instrument : A bill of exchange is a device by which the purchaser or debtor in a credit transaction is not required to make immediate payment but satisfies the seller or creditor by accepting in writing the liability to pay the amount due from him.

Text Solution

Verified by Experts

A bill of exchange is a device by which the purchaser or debtor in a credit transaction is not required to make immediate payment but satisfies the seller or creditor by accepting in writing the liability to pay the amount due from him.
Promotional Banner

Topper's Solved these Questions

  • BILL OF EXCHANGE

    NCERT|Exercise Questions for Practice|22 Videos

  • BILL OF EXCHANGE

    NCERT|Exercise Numerical Questions|23 Videos

  • BILL OF EXCHANGE

    NCERT|Exercise Test Your Understanding-II|8 Videos

  • BANK RECONCILIATION STATEMENT

    NCERT|Exercise LONG ANSWER|3 Videos

  • CASH FLOW STATEMENT

    NCERT|Exercise Numerical Questions|12 Videos

Similar Questions

Explore conceptually related problems

On Feb 01, 2016, John purchased goods for Rs 15,000 from Jimmi. He immediately made a payment of Rs 5,000 by cheque and for the balance accepted the bill of exchange drawn upon him by Jimmi. The bill of exchange was payable after 40 days. Five days before the maturity of the bill, Jimmi sent the same to his bank for collection. The bank duly presented the bill to John on the due date who met the bill. The bank informed the same to Jimmi. Prepare John’s account in the books of Jimmi and Jimmi account in the books of John.

A owed B ₹ 400. A accepted a Bill of Exchange at 3 months for this amount which B discounted for ₹ 380 Give the necessary Journal entries in the books of A and B of this bill is : (a) dishonoured on the due date (b) met at maturity and (c) retired under rebate at 6% p.a. 2 months before its maturity.

A bill falls due in 1 year.The creditor agrees to accept immediate payment of the half and to defer the payment of the other half for 2 years. By this arrangement he gains Rs 40.What is the amount of the bill,if the money be worth 12(1)/(2)%?

On Jan 01, 2016 Rao sold goods Rs 10,000 to Reddy. Half of the payment was made immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after 30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill to Reddy and received the payment. Journalise the above transactions in the books Rao and prepare of Rao’s account in the books of Reddy.

On Jan 01, 2017 Vibha sold goods worth Rs 18,000 to Sudha and drew upon the latter a bill of exchange for the same amount payable after two months. Sudha accepted Vibha’s draft and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel the bill since she was short of funds. She further requested to draw a new bill upon her including interest of Rs 200. Vibha accepted Sudha’s request. Vibha took the bill from Geeta by making the payment to her in cash and cancelled the same. Then she drew a new bill upon Sudha as agreed. The new bill was payable after one month. The new bill was duly met by Sudha on maturity. Record the necessary journal entries in the books of Vibha.

Ankit owes Nikita a sum of Rs 6,000. On April 01, 2016 Ankit gives a promissory note for the amount for 3 months to Nikita who gets it discounted with her bankers for Rs 5,760. on the due date the bill is dishonoured, the bank paid Rs 15 as noting charges. Ankit then pays Rs 2,000 in cash and accepts a bill of exchange drawn on him for the balance together with Rs 100 as interest. This bill of exchange is for 2 months and on the due date the bill is again dishonoured, Nikita paid Rs 15 as noting charges. Draft the journal entries to be recorded in Nikita’s books

On Jan 15, 2015, Kartar Sold goods for Rs 30,000 to Bhagwan and drew upon him three bills of exchanges of Rs 10,000 each payable after one month, two month, and three months respectively. The first bill was retained by Kartar till its maturity. The second bill was endorsed by him in favour of his creditor Ratna and the third bill was discounted by him immediately @ 6% p.a. All the bills were met by Bhagwan. Journalise the above transactions in the books of Kartar and Bhagwan. Also prepare ledger accounts in books of Kartar and Bhagwan.

Abdulla sold goods to Tahir on Jan 17, 2017 for Rs 18,000. He drew a bill of exchange for the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla paid Rs 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of Rs 18,700 including interest and noting charges. Record the necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir’s account in the books of Abdulla and Abdulla’s account in the books of Tahir.

Asha sold goods worth Rs 19,000 to Nisha on March 02, 2017. Rs 4,000 were paid by Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank. On the due date Nisha dishonoured the bill and the bank paid Rs 30 as noting charges. Record the necessary journal entries in the books of Asha and Nisha.