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01	Financial Accounting ICOM Mcqs Chapter 01	02	Financial Accounting ICOM Mcqs Chapter 02
03	Financial Accounting ICOM Mcqs Chapter 03	04	Financial Accounting ICOM Mcqs Chapter 04
05	Financial Accounting ICOM Chapter 05	06	Financial Accounting ICOM Chapter 06
07	Financial Accounting ICOM Mcqs Chapter 07	08	Financial Accounting ICOM Mcqs Chapter 08
09	Financial Accounting ICOM Mcqs Chapter 09	10	Financial Accounting ICOM Mcqs Chapter 10
11	Financial Accounting ICOM Mcqs Chapter 11	12	Financial Accounting ICOM Mcqs Chapter 12
13	Financial Accounting ICOM Mcqs Chapter 13	14	Financial Accounting ICOM Mcqs Chapter 14
15	Financial Accounting ICOM Mcqs Chapter 15	16	Financial Accounting ICOM Mcqs Chapter 16

Chapter – 6

Accounting for Bill of Exchange

Encircle the most appropriate answer from the following four answers

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1. A bill of exchange is a method of payment on:

1. Cash basis
2. Credit basis
3. Accommodation basis
4. Reserve basis

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2. A bill of exchange is defined under Bills of exchange Act:

1. 1982
2. 1882
3. 1906
4. 1932

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3. A bill of exchange is an:

1. Unconditional order
2. A Request
3. A Promise
4. Conditional order

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4. A person who writes out the order to pay is called:

1. Acceptor
2. Drawee
3. Payee
4. Drawer

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5.A person who is ordered to pay is called:

1. Drawer
2. Endorsee
3. Drawee
4. Creditor

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6.When a drawer discounts the bill, he gets:

1. More than face value
2. None of these
3. Less than face value
4. Equal to face value
   

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7.It is a period of time after which a bill becomes payable:

1. Grace days
2. Tenor
3. Maturity
4. Usance

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8. The bills become payable at any time when they are presented by the holder are called:

Accommodation bills

Trade bills

Term bills

Demand bills

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9.In case of term bill extra three days are given to acceptor are called:

1. Days of grace
2. Days of Bill receivable
3. Day of tenor
4. Days of bill of exchange

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10. A bill of exchange is drawn by:

1. Creditor
2. Endorsee
3. Debtor
4. Endorser

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11. If drawer is in need of money and cannot wait tilI due date and receive the money from bank it will be:

1. Retirement of bill
2. Discounting of bill
3. Endorsement of bill.
4. Dishonor of bill.

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12. When a drawer transfers a bill to his creditor for settlement of his own debts is called:

1. Retirement of bill
2. Endorsement of bill
3. Discounting of bill
4. Settlement of bill

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13.when a drawee honours his acceptance he will be credited:

1. Capital account
2. Bill payable account
3. Drawer account
4. Cash account

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14. How many parties are involved in case of discounting of bill:

1. Two
2. Four
3. Three
4. None of these

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15. When a drawer discounts a bill, he debits:

1. Bank account
2. Drawee account
3. Interest account
4. Bill receivable account

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16.The person to whom the bill is transferred will become:

1. Endorser
2. Debtor
3. Creditor
4. Endorsee

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17.When a bill is endorsed, then the endorser has:

1. Current liability
2. Contingent Liability
3. Fixed liability
4. None of those

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18. A bill from the point of view of a debtor is called:

1. Bill acceptable
2. Bill payable
3. Bill receivable
4. None of these

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19.Tn case of endorsement of bill the endorser debits:

1. Bill payable account
2. Creditor account
3. Cash account
4. Bill receivable account

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20.Bank for collection account” is a:

1. Permanent account
2. Current account
3. Fixed account
4. Temporary account

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21.When an acceptor refuses to pay the amount of bill to the holder of bill on its maturity is called:

1. Honored bill
2. Dishonored bill
3. Retired bill
4. Endorsed bill

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22.When a bill is dishonored, the holder of the bill goes to an official called:

1. Drawer
2. Notary public
3. Manager
4. Inspector

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23.When noting charges are paid at the time of dishonor of the bill, the drawee always debits:

1. Noting charges account
2. Discount account
3. Drawer’s account.
4. Interest account

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24.In case of dishonor of bill, noting charges for dishonored bill are always paid by:

1. Notary Public
2. Drawer of bill
3. Acceptor of bill
4. Holder of bill.

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25.When the bill is dishonored acceptor’s account is debited in the books of the:

1. Endorsee
2. Bank
3. Drawer
4. Drawee

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26.Interest on renewal of a bill is an expense to the:

1. Drawer
2. Acceptor
3. Endorser
4. Endorsee

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27. interest on renewal of a bill is an income to the:

1. Drawee
2. Debtor
3. Drawer
4. Acceptor

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28.When a drawee is declared insolvent, which account is to be debited in the books of drawer:

1. Deficiency account
2. Bad debts account
3. None of these
4. Solvency account

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29.In case of retirement of bill, the rebate or discount is a revenue for the:

1. Holder
2. Drawer
3. Payee
4. Acceptor\

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30.Accommodation bills are drawn, accepted and endorsed:

1. For quarter consideration
2. Without any consideration
3. For some consideration
4. None of these

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31.Retiring a bill under rebate means:

1. Payment of bill before due date
2. Making payment for the bill after due date:
3. Dishonored bill.
4. Discounting bill

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32.Bill payable account is a:

1. Nominal account
2. Real account
3. Personal account
4. None of these

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33.A trader whose assets exceed from his liabilities is called:

1. Debtor
2. Creditor
3. Solvent
4. Insolvent

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