Question # 1

Interest on renewal of a bill is the expense of

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Drawer

Drawee

Holder

Endorsee

A bill which is both drawn and payable within the geographical boundaries of a country

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Foreign Bill

Local Bill

Municipal Bill

Inland Bill

When a drawee honours his acceptance, he will credit

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Capital Account

Drawer Account

Bill Payable Account

Cash Account

A bill of exchange is a method of payment on

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Cash Basis

Credit Basis

Reserve Basis

Accommodation Basis

A many buy Rs. 40,000 worth good and sells them for Rs. 50,000. His gross profit is:

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Rs.10,000

Rs.20,000

Rs,30,000

Rs. 40,000

Subsidiary books are called the book of:

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Original entry

Secondary entry

Temporary entry

Basic entry

How many parties are involved in case of Discounting of a bill ?

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Two

Three

Four

None of these

The Legal tenor of a bill is

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Sixty Days

One Month

Eighty Days

Ninety Days

A bank reconciliation statement is prepared by:

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banker

Accountant of the business

Statutory auditors

Rigistar

When bank column of a cash book shows a credit balance, it means:

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Cash balance

Bank balance

Under draft

Over draft

When an acceptor refuses to pay the amount of bill to the holder on its maturity date it is called

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Honoured Bill

Retired Bill

Dishonoured Bill

Endorsed Bill

The act of withdrawing a bill of exchange from circulation when it had been paid before the due date

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Renewal of a Bill

Discounting of a Bill

Endorsement of a Bill

Retiring of a Bill

Real accounts are related to:

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Assets

Expenses, losses and incomes

Customers, creditors

Incomes

At the time of drawing a bill the drawer credits:

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Debtors account

Creditors account

bill receivable account

Suppliers account

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

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Deficiency a/c

Bad Debts a/c

Solvency a/c

None of these

Any activity undertaken for the purpose of earning profit is called:

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Performance

Dealing

Business

Duties

Accommodation bills are drawn accepted and endorsed

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Without any Consideration

for some Consideration

for Quarter Consideration

none of the above

All those expenses which are incurred to convert raw-materials into finished goods are called:

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Direct expenses

Indirect expenses

Administrative expenses

Sales expenses

When a bill is transferred by the drawer to his creditor, for settlement of his debts, it is called

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Retirement of Bill

Endorsement of a Bill

Discounting of a Bill

Settlement of a Bill

Narration is always written:

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Above each entry

Below each entry

Between of each entry

None of these

The time after which the bill is to be paid

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Grace Days

Tenor

Due Date

Extra Days

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Principles of accounting Icom Part 1 English Medium Chapter 3 Online Test MCQs With Answers

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