Micheal Vaz solutions for Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board chapter 9 - Bill of Exchange (Trade Bill) [Latest edition]

Answer the following question in one sentence only.
What is bill of exchange?

Answer in one sentence only.
Who is Drawer?

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Who is Drawee?

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What is due date of bill?

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What is an acceptance to bills of exchange?

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What is qualified acceptance?

Give word / term or phrase for the following statement.
Acceptance with some changes as regards the terms of a bill.

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When is the bill said to be honoured?

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When is the bill said to be dishonoured?

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What is inland bill exchange?

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What is foreign bill of exchange?

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What are Noting Charges?

Answer the following question in one sentence only.
When is the amount of bill of exchange payable to a specific person?

Give word / term or phrase for the following statement.
A bill of exchange drawn and accepted for a value received.

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A person who draws a bill of exchange.

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A person on whom a bill of exchange is drawn.

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Payment in accordance with the apparent tenor of the bill.

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Nonpayment in accordance with the apparent tenor of the bill.

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Acceptance without making any change in the terms of a bill.

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A bill of which payment to make on fixed period.

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The bill which is drawn in one country and payable in other country.

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Encashment of the bill before due date.

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The person who transfer the ownership of the bill.

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The person in whose favour the bill transferred.

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Transfer of title of the bill from debtor to creditor.

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Payment of the bill before due date.

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Fees charged by the Notary public on dishonour of a bill.

Give word/term or phrase for the following statement.

Officer appointed by the Central Government for noting of dishonor of a bill

Write True or False.
Bill of exchange is an instrument in writing, containing an unconditional order.

A bill of exchange is signed by the person on whom it is drawn.

State whether the following statement is True or False.
A person to whom or as per his order, amount of bill is payable is a Payee.

Write True or False.
Honour of a bill means payment in accordance with the apparent tenor of the bill.

Write True or False.
Acceptance without making any change in the terms of a bill is called general acceptance.

Write True or False.
Acceptance with some change as regards the terms of a bill general acceptance.

Write True or False.
A bill of which payment to make on fixed period is after date bill.

Write True or False.
Drawee is a person who holds the title of the bill in due course.

Write True or False.
The inland bill which is drawn in and payable in the same country.

Write True or False
Discounting means encashment of the bill before due date.

Write True or False
Drawee can transfer the ownership of the bill.

Write True or False
Endorsee is person in whose favor the bill transferred.

Write True or False
Endorsement means transfer of title of the bill from debtor to creditor.

Write True or False
Retirement of bill means payment of the bill before due date.

Write True or False
Noting charges are payable to the Notary public on honour of a bill.

Write True or False
Payee is official person appointed by Central government for noting of dishonour bill.

Write True or False
Renewal is a request by drawee to extend the credit period of the bill.

Write True or False
A bill can't be deposited into bank for collection.

Hitesh sold goods for Rs 4,500 to Ashok on 1.1.2010 and drew upon him a bill of exchange payable 2 months after sight. Ashok accepted the bill and returned the same to Hitesh. On the due date the bill was met by Ashok.
Record the necessary Journal entries in the books of Hitesh and also prepare Ashok account in his books.
1. When the bill was retained by Hitesh till the date of its maturity.
2. When Hitesh immediately discounted the bill @ 15% p.a. with his bank.
3. When three days before its maturity, the bill was sent by Hitesh to his bank for collection.
4. When the bill was endorsed immediately by Hitesh in favour of his creditor Venkat.

On 2^nd Jan., 2011 Kiran of Kanpur purchased goods from Kavita of Kedgaon for Rs 4,850 and gave his acceptance to after date bill for 60 days on 5^th Jan, 2011 for the same amount. On the same date Kavita of Kedgaon deposited the bill into bank for collection. On the due date Kiran honoured his acceptance.
 You are required to pass journal entries in the books both the parties. 

Vasanti sold goods on credit of Rs 8,500 to Aruna on 14^th July 2009. On the same date Vasanti drew two bills for Rs 5,000 and 3,500 for 2 and 3 months period respectively. Aruna accepted and return immediately. On 21^st July, 2009 Vasanti deposited 3 months acceptance to her bank for collections.
 On the due date of the respective bills Aruna honoured 2 months acceptance but dishonoured the second for which Vasanti paid nothing chargers Rs 60 and her bank debited 50 for bank chargers
 Pass the journal entries in the books of Vasanti and Aruna.

Sudhatai sold goods to Chhayatai on credit for 4 months for Rs 10,000 on 7^th Sept., 2009. Chhayatai paid on her account of Rs 4,000 at 2% cash discount and accepted bill for the balance at 2 months. On the same date Sudhatai discounted with her bank at 12% p.a. on due date Chhayatai honoured her bill.
A. You required to write journal of Sudhatai.
B. Pass journal entries in the books of Sudhatai assuming that on due date the bill is dishonoured and Sudhatai’s bank paid noting chargers Rs 100.

On 1^st August, 2010 Swapnali sold goods to Swapnil on credit for Rs 20,000. And drew two bills of 60% and 40% of the amount due from Swapnil for 3 and 4 months period respectively. Swapnil accepted and return it to Swapnali immediately. On 1^st September 2010 Swapnali send 3 months acceptance to her bank for collection and discounted 4 months acceptance with her bank @ 18% p.a.

On the due date of the respective bills Swapnil honoured 3 months acceptance for which bank debited Rs 50 as bank charges. On due date of 4 months acceptance Swapnil dishonoured for which Swapnali’s bank paid nothing charges Rs 100.
 
Pass the journal entries in the books of Swapnali and prepare Swapnil’s account in her ledger.

On 1^st August, 2012 Omprakash drew a bill of Rs 10,000 for 60 days after date on Sharadchandra. On 15^th August, 2012 Omprakash purchased goods from Hariprasad for Rs 12,000. On the same date Omprakash endorsed Sharadchandra’s bill in favour of Hariprasad and paid the balance by cheque at 1% cash discount. On the same date Hariprasad discounted the bill with his bank for Rs 9,500.
 
On the due date Sharadchandra honoured his acceptance presented by Hariprasad.You are required to pass journal entries in the books of Omprakash, Sharadchandra and Hariprasad.

On 5^th September, 2010 Prakash Patil accepted a bill of Rs 16,000 drawn by Chandu Chaudhari for 3 months. This bill was drawn for amount which Prakash Patil owed to Chandu Chaudhari. On same date Chandu Chaudhari purchased goods from Magan Mahajan for Rs 20,000 for this Chandu Chaudhari endorsed Prakash Patil’s acceptance in favour of Magan Mahajan and accepted 2 months bill for the balance due. On 5^th October, 2010 Magan Mahajan discounted both the bill with his bank @ 12% p.a.

 On the due date Prakash Patil’s honoured his acceptance while Chandu Chaudhari unable to meet the payment for his acceptance. Magan Mahajan’s bank paid noting charges Rs 100.
 
Pass Journal entries in the books of Magan Mahajan and also prepare Prakash Patil’s and Magan Mahajan ledger account in the books of Chandu Chaudhari.

Harbhajan draws a bill on Manmit for Rs 8,000 at 3 months. Manmit accepts and return to Harbhajan. Harbhajan then sends the bill towards his bank for collections.
 On due date Manmit find himself unable to make payment of the bill and request Harbhajan to renew it. He accepted the proposal on the condition that Manmit should pay Rs 2,000 along with interest @ 15% p.a. in cash and should accepts new bill for the balance at 2 months. These arrangements were carried through. One month before Manmit retired his acceptance @ 12% p.a.
Give journal entries and Manmit’s Account in the books of Harbhajan.

On 1^st April, 2011 Umakant draws a bill for Rs 25,000 on Laxmikant for 4 months period. The bill is accepted and returned to Umakant. On the same date Umakant discounted the bill with his bank @ 12% p.a.
 Before due date Laxmikant finds himself unable the bill, hence required Umakant to renew the bill for further period of 2 months. Umakant agreed and he took the bill back from bank and received new acceptance for Rs 26,000 including interest. This new bill is duly honoured by Laxmikant on due date.
 Write Journal of Umakant and Laxmikant for the above bill transactions.

On 1^st June, 2010 Narayan draws a bill for Rs 50,000 on Chunilal for 4 months period.
The bill is duly accepted and returned to Narayan. One month after the date. Narayan discounted the bill with bank @ 18% p.a.
 
Before due date Chunilal dishonoured his acceptance. Bank paid noting charges Rs 1,125.  Narayan requested to renew the bill for further period of 2 months. Narayan agreed he took the bill back from bank and received new acceptance for 40% amount of the bill with full amount of noting charges and cheque for 60% balance plus interest @ 12% p.a.

Before the due date Chunilal declared insolvent and 30% of the amount due could be recovered from his private estate.
 Write Journal of Narayan and Chunilal for the above bill transactions.

Sushant owes Surekha Rs 1,25,000 Surekha draws a bill for Rs 1,00,000 on Sushant for 4 months period and received the cheque for the balance. The bill is duly accepted and returned by Sushant. On the same date Surekha endorsed Sushant’s acceptance to Suresh.
 On the due date Suresh informed Surekha that Sushant dishonoured his acceptance and Rs 3,175 paid as noting charges Surekha then drew a new bill for 3 month on Sushant including noting charges and interest Rs 4,000. On the due date bill was duly honoured by Sushant.
 Write Journal entries in the books of Surekha and prepare Surekha’s account in the books of Sushant.

On 7^th May, 2011 Kulkarni of Karvenagar draws a bill on Patwardhan of Latur for Rs 18,000 at 3 months. Patwardhan accepts and returns it to Kulkarni. Kulkarni then sent the bill into his bank for collections.
                    On due date Patwardhan finds himself unable to make payment of the bill and request Kulkarni to renew it. Kulkarni agreed on the condition that Patwardhan should pay Rs 5,000 in cash, and should accept new bill for the balance at 2 months with interest @ 18% p.a. These arrangements were carried through. Before due date Patwardhan declared as insolvent and 20% of the amount due could be recovered from his private estate as first and final dividend.
                    Give journal entries in the books of Kulkarnis. Also prepare Kulkarni’s Accounts in the books of Patwardhan.

On 1^st Sept., 2010 Badrinath drew a bill of Rs 20,000 on Dinanath at 4 months. The bill was duly accepted by Dinanath. On 5^th Sept., 2010 Badrinath endorsed the bill in favour of Somnath. However on 1^st January, 2012 Dinanath approached to Badrinath and requested bill be renewed for a further period of 3 months at 15% p.a. Badrinath agreed and paid necessary money to Somnath. Before one month of the due date of the new bill Dinanath retired his acceptance @ 10% p.a.
          Pass journal entries in the books Badrinath and Dinanath.

Journalise the following bill transactions in the books of Gopal as on 14^th August, 2010.

1. Shruti’s acceptance to Gopal Rs 4,500 retired one month before due date at rebate 10% p.a.

2. Discounted 3 months acceptance of Chandrakant for Rs 3,500 with bank @ 12% p.a.

3. Received cheque Rs 2,000 and 2 months acceptance drawn on Sushama for Rs 10,000 for the balance due on her account.

4. Endorsed Shantaram’s acceptance at 2 months of Rs 5,000 in favour of Balchandra and paid cash Rs 2,500 in full settlement of this account Rs 7,800.

5. Sold goods of Rs 13,500 on credit to Nanda. Drew 2 months bill on her. Which is duly accepted and returned by her.

Journalise the following bill transactions as on 21^st May, 2010 in the books of Prabodhan.
A. Renewed Veerendra’s acceptance of Rs 17,500 due on 21^st May 2010 with interest Rs 500 for 2 months.

B. Bank informed that Radhabai’s acceptance of Rs 1,400 which was discounted dishonoured, bank paid noting charges Rs 185.

C. Sent acceptance of Rs 12,000 at 120 days after sight, drawn by Mudhukar for the amount due to him.

D. Pandharinath honoured his acceptance of Rs 8,500 which was deposited into bank for collection.

Journalise the following bill transactions as on 31^st July, 2011 in the books of Pratapsing.
A. Renewed Vinyak’s acceptance of Rs 6,000 due on 31^st July, 2011 by accepting cash Rs 2,000 and drawing bill for the balance with interest @ 18% p.a. for 3 months.

B. Accepted a bill of Rs 5,000 at 3 months at sight, drawn by Arvind for the amount due to him Rs 6,000 and balance paid by cheque.

C. Jethabhai honoured his acceptance of Rs 9,800 which was deposited into bank for collection and bank debited Rs 80 for bank charges.

D. Bank informed that Prajakta’s acceptance of Rs 4,000 which was discounted dishonoured, bank paid noting charge Rs 85. Renewed at her request for next 2 months with interest @ 18% p.a.

Journalise the following transactions on the following dates in the books of Ankur.
A. On 1^st April 2011, Kiran informs Ankur that Kajol’s acceptance of Rs 8,000 endorsed to him dishonoured and noting charges paid Rs 250.
B. On 11^th April 2011, Ankur renews his acceptance of Rs 7,400 to Amol by paying cash Rs 2,400 and accepting new bill for 2 months for the balance plus interest @ 15% p.a.
C. On 15^th April 2011, Nilima retired her acceptance to Ankur of Rs 5,700 by paying cash Rs 5,300.
 D. On 21^st April 2011, recovered Rs 50% of the amount due, from the private estate of Liladhar who declared as insolvent, against his bill of Rs 3,800 which was dishonoured by him on 29^th December 2010 and noting charges paid Rs 80.

Journalise the following transactions on following dates in the books of Gajanan
A. On 3^rd October, 2012 Bankatlal informs Gajanan that Navnath’s acceptance of Rs 16,000 endorsed to him dishonoured and noting charges paid Rs 200.
B. On 9^th October, 2012 Vishwanath’s acceptance for 120 days of Rs 15,500 dated 24^th September, 2008 deposited into bank for collections.
C. On 11^th October 2012 Gajanan sold goods to Kartik for Rs 4,500 and received own acceptance from him, which was given to milind of Rs 4,500 and due for payment on this date.
D. 20^th October, 2012 recovered 40% of the amount due the private estate of Jyoti who declared as insolvent, against bill accepted by her for Rs 6,000 which was dishonoured on 29^th September, 2008.
E. On 21^st October, 2012 Gajanan renews his acceptance of Rs 7,500 to Pandurang by paying cheque Rs 3,500 and accepting new bill for 2 months for the balance plus interest @ 18% p.a.