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Vidaara.orgClass 11 · Mathematics
CodeVID-M11-WS
Bills of Exchange — Practice Worksheet
Chapter: Bills of Exchange
Topic: Bills of Exchange
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
A bill of exchange contains an unconditional:
  • A.Promise
  • B.Order to pay
  • C.Request
  • D.Receipt
2.
The person who makes (draws) the bill is the:
  • A.Drawee
  • B.Drawer
  • C.Payee
  • D.Notary
3.
The person who accepts the bill and pays it is the:
  • A.Drawer
  • B.Drawee (acceptor)
  • C.Payee
  • D.Endorsee
4.
A promissory note contains a:
  • A.Order
  • B.Promise
  • C.Request
  • D.Cheque
5.
Date of maturity = due date plus:
  • A.3 days of grace
  • B.1 day
  • C.10 days
  • D.1 month
6.
In the drawer's books, on acceptance the entry is:
  • A.Bills Receivable A/c Dr; To Drawee
  • B.Bills Payable A/c Dr; To Drawer
  • C.Cash A/c Dr; To Sales
  • D.Drawee A/c Dr; To Cash
7.
Getting a bill discounted gives the drawer:
  • A.Full value
  • B.Value minus discounting charges
  • C.Double value
  • D.Nothing
8.
Discounting charges are the drawer's:
  • A.Income
  • B.Expense (loss)
  • C.Asset
  • D.Capital
9.
Transferring a bill to one's creditor is:
  • A.Discounting
  • B.Endorsement
  • C.Retention
  • D.Renewal
10.
What the drawer does with a bill affects the drawee's books:
  • A.Greatly
  • B.Not at all
  • C.Sometimes doubles them
  • D.Cancels them
11.
Failure of the acceptor to pay at maturity is:
  • A.Retirement
  • B.Dishonour
  • C.Renewal
  • D.Endorsement
12.
Legal proof of dishonour is obtained by ____ the bill.
  • A.Noting
  • B.Endorsing
  • C.Discounting
  • D.Retiring
13.
Noting charges are borne by the:
  • A.Drawer
  • B.Acceptor (drawee)
  • C.Bank
  • D.Payee
14.
Drawing a fresh bill for more time is:
  • A.Renewal
  • B.Retirement
  • C.Noting
  • D.Endorsement
15.
Paying a bill before its due date for a rebate is:
  • A.Renewal
  • B.Retirement
  • C.Dishonour
  • D.Discounting
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
A held a Rs 20,000 bill which he discounted at 12% p.a. for 3 months. The discounting charge and cash received are:
  • A.Charge Rs 600; cash Rs 19,400
  • B.Charge Rs 2,400; cash Rs 17,600
  • C.Charge Rs 600; cash Rs 20,600
  • D.Charge Rs 200; cash Rs 19,800
17.
A discounted bill is dishonoured. The drawer must FIRST:
  • A.Repay the bank the bill amount (plus any noting charges)
  • B.Do nothing
  • C.Endorse it again
  • D.Retire it
18.
Why are noting charges added to the amount the acceptor owes rather than borne by the drawer?
  • A.The acceptor caused the dishonour, so he must bear the legal cost
  • B.The drawer is at fault
  • C.The notary pays them
  • D.They are income
19.
On renewal of a bill, interest of Rs 500 is charged and added to the new bill. In the drawer's books the interest is:
  • A.An income (Interest A/c credited)
  • B.An expense
  • C.An asset
  • D.A liability
20.
A bill for Rs 12,000 due on 1 August is retired on 1 July at 12% p.a. rebate. The rebate is:
  • A.Rs 120
  • B.Rs 1,440
  • C.Rs 12
  • D.Rs 1,200
21.
A bill endorsed to a creditor is later dishonoured. The original drawer's position is that he:
  • A.Must pay the endorsee and can recover from the acceptor
  • B.Owes nothing
  • C.Keeps the money
  • D.Pays the notary only
22.
The maturity date of a 60-day bill dated 5 June (counting days, +3 grace) falls on about:
  • A.7 August
  • B.5 August
  • C.4 August
  • D.8 September
23.
A key advantage of a bill of exchange over an ordinary book debt is that it:
  • A.Is a legally enforceable, transferable instrument with a fixed due date
  • B.Never has to be paid
  • C.Earns no interest ever
  • D.Cannot be transferred
24.
When a bill is sent to the bank merely 'for collection', until it matures the drawer should:
  • A.Transfer it to a 'Bills sent for collection' account, still his asset
  • B.Treat it as discounted
  • C.Write it off
  • D.Record income
25.
On the SAME transaction, 'Bills Receivable' in the drawer's books corresponds to ____ in the drawee's books.
  • A.Bills Payable
  • B.Bills Receivable
  • C.Cash
  • D.Capital

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (B) Order to pay
  2. (B) Drawer
  3. (B) Drawee (acceptor)
  4. (B) Promise
  5. (A) 3 days of grace
  6. (A) Bills Receivable A/c Dr; To Drawee
  7. (B) Value minus discounting charges
  8. (B) Expense (loss)
  9. (B) Endorsement
  10. (B) Not at all
  11. (B) Dishonour
  12. (A) Noting
  13. (B) Acceptor (drawee)
  14. (A) Renewal
  15. (B) Retirement
Section B — Challenge / Olympiad (2 marks each)
  1. (A) Charge Rs 600; cash Rs 19,400
  2. (A) Repay the bank the bill amount (plus any noting charges)
  3. (A) The acceptor caused the dishonour, so he must bear the legal cost
  4. (A) An income (Interest A/c credited)
  5. (A) Rs 120
  6. (A) Must pay the endorsee and can recover from the acceptor
  7. (A) 7 August
  8. (A) Is a legally enforceable, transferable instrument with a fixed due date
  9. (A) Transfer it to a 'Bills sent for collection' account, still his asset
  10. (A) Bills Payable
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