The person to whom the amount mentioned in the promissory note is payable is known as _________.

1

(a)

Promisee

Transfer of a negotiable instrument to another person by signing on it, is known as ________.

1

(a)

Endorsement

In a promissory note, the person who makes the promise to pay is called as _________.

1

(a)

Promisor

A bill of exchange is a ____________ instrument.

1

(a)

Negotiable

A bill of exchange is drawn by the ________ upon his _________.

1

(a)

Drawer, Drawee

A negotiable instrument does not require the signature of its maker.

1

(a) True

(b) False

The hundi payable at sight is called Darshani hundi.

1

(a) True

(b) False

A negotiable instrument is not freely transferable.

1

(a) True

(b) False

Stamping of promissory note is not mandatory.

1

(a) True

(b) False

The time of payment of a negotiable instrument need not be certain.

1

(a) True

(b) False

State any two advantages of bills of exchange.

1

(a)

(i) Bills of Exchange may be used as an evidence of debt.
(ii) Bills of exchange may be converted into cash before the date of maturity.

What are the days of grace?

1

(a)

Days of grace are three extra days added to the period of bill to ascertain date of maturity.

How many days of grace are added to the period of a bill of exchange?

1

(a)

3 (Three) days.

Calculate the due date of a bill of exchange written on July 13, 2014 for 30 days.

1

(a)

14th August, 2014.

Mention any two uses available to a holder for dealing with bills receivable?

1

(a)

(i) To discount the bill
(ii) To endorse the bill.

Name any two types of commonly used negotiable instruments.

3

(a)

What is meant by dishonour of a Bill of Exchange?

3

(a)

What is meant by renewal of a bill of exchange?

3

(a)

Give the proforma of Bills Payable book.

3

(a)

Give the meaning of Rebate?

3

(a)

Define Bill of Exchange. Explain its advantages.

4

(a)

Explain the following terms regarding Bills of Exchange:
(i) Endorsement
(ii) Paying Bill of Exchange before maturity date.

4

(a)

A sold goods for Rs 50,000 to B on 1st January, 2014, and on the same day drew a bill on B at three months for the amount. The bill is duly accepted but is dishonoured on the due date. A pays Rs 1,000 as noting charges. Record these transactions in the Journals of A and B.

6

(a)

On 1^st January, 2014, A sold goods to B for Rs 5,000 and on the same day drew upon him a bill at three months for the amount. B accepted the bill and returned it to A. On 4^th January, 2014, A discounted the bill with his bank at Rs 4,900. On the due date, the bill was dishonoured and bank paid Rs 100 as noting charges. Record these transactions in the Journals of A and B.

6

(a)