Account 6 Marks Question

X sold goods to Y on 1.3.2017 for ₹ 12,000 and drew upon Y a bill of exchange for the same amount payable after two months. X immediately discounted the bill with his bank at 9% p.a. The maturity date of the bill was a non business day (holiday), therefore, X had to present the bill as per the provisions of the Indian Instruments Act, 1881. The bill was dishonoured by Y and X paid ₹ 45 as noting charges. Y settled the claim of X five days after the dishonour of the bill by a cheque which included interest @ 12% for the term of the bill.
Journalise the above transactions in the books of X and Y and prepare Y's account in the books of X and X's account in the books of Y.

Fill up the missing information in the following journal entries:

On 1st January, 2019, A drew a bill on B for ₹ 10,000 payable after 3 months. B accepted the bill and returned it to A. After 10 days, A endorsed the bill to his creditor C. On the due date, the bill was dishonoured and C paid ₹ 50 as noting charges.
Record the transactions in the books of A, B and C.

On Feb. 01, 2017, Mohan sold goods worth ₹ 25,000 to Naresh and drew upon him a bill payable after 90 days. Naresh accepted the bill and Mohan endorsed the bill immediately in favour of his creditor Raja in full settlement of his account of ₹ 25,300. One week before the maturity of the bill Naresh requested Mohan to cancel the bill and draw upon him a new bill including interest of ₹ 400. Mohan agreed to it. Mohan immediately took the bill from Raja by making the payment to him and then drew upon Naresh a new bill for 30 days which was duly met by Naresh on due date.
Pass necessary entries in the books of Mohan.

Vinod sold goods to Darbara Singh for ₹ 1,000 on 1st January, 2019. He drew on the latter a bill for the amount payable 3 months after date. He discounted the bill with his bank for ₹ 990 on 4th January, 2019. On maturity, the bill is duly met. Make the Journal entries in the books of Vinod and Darbara Singh.

On 21st Sept. 2017, Radhika sold goods for ₹ 2,00,000 to Parvati and drew upon later a bill for the same amount payable after 3 months. The bill was accepted by Parvati, Radhika discounted the bill from bank at a discount of 15% p.a. on 21st Oct., 2017. On maturity, the bill was dishonoured. Parvati agreed to pay ₹ 1,20,000 in cash including ₹ 3,000 interest and accepted a new bill for 3 months. The new bill was endorsed to Gayatri in full settlement of his account ₹ 85,000. It was duly met on maturity. Pass entries in the books of Radhika.

On 17th April, 2016, X sold goods to Y for ₹ 80,000 and draws a bill for 2 months upon Y for the amount due. Y accepted the bill and returned it to X. On due date the bill became dishonoured and X paid ₹ 400 as Noting Charges. Fifteen days later Y pays the amount due to X. Pass Journal entries in the books of both the parties.

Explain any three of the following:

1. Retiring of Bills of Exchange.
2. Holder in due course.
3. Bills sent to bank for collection.
4. Noting charges.

On 15th January 2018, X sold goods to Y for ₹ 50,000 charging IGST @ 12%. Yimmediately paid ₹ 6,000 in cash and accepted two bills of equal amount, the first for one month and the second for two months. The first bill was met on due date but on the due date of the second bill, Y requested that the bill be renewed for a further period of two months. X agreed provided that interest at 15% p.a. was paid immediately in cash. Yagreed to this. The second bill was met on the due date.
Give journal entries in the books of X and Y.

On 1st February 2018, A sold goods to B for ₹ 40,000 Charging CGST and SGST @ 9% each. B pays ₹ 17,200 in cash and accepted a three months bill for the balance. On the due date, B expressed his inability to meet the bill and offered ₹ 12,000 in cash and to accept a new bill for one month for the balance plus interest at 18% p.a. A agrees to the proposal. On the due date the bill was duly honoured by B. Pass entries in the books of A and B.

On 1st Jan., 2016, Satish drew on Harish three bills of exchange in full settlement of claims, the first for ₹ 14,000 at one month; the second for ₹ 16,000 at two months and the third for ₹ 18,000 at three months. The bills were duly accepted by Harish. The first bill was endorsed by Satish to his creditor Rajnish on 3rd Jan., 2016. The second bill was discounted on 15th Jan. for ₹ 15,900 and the third bill was sent to bank for collection on 4th Feb. All the bills were met on maturity except the second bill which was dishonoured, noting charges being paid ₹ 240. Satish charged ₹ 300 for interest from Harish and drew on him a fourth bill for two months for ₹ 16,540. The fourth bill was duly met on maturity. Give Journal entries in the books of Satish and Harish.

A purchased goods for ₹ 15,000 from B on March 01, 2017 and accepted a bill of exchange drawn by B for the same amount. The bill was payable after 60 days. On April 28, B sent the bill to his bank for collection. The bill was duly presented by the bank. Adishonoured the bill and the bank paid ₹ 150 as noting charges.
Record the necessary journal entries for the above transactions in the books of A and B.

Leena sold goods to Meena on 1st March, 2009 for ₹ 68,000 and drew two Bills of Exchange of the equal amount upon Meena payable after three months. Leena immediately discounted the first bill with her bank at 12% p.a. The bill was dishonoured by Meena and Bank paid ₹ 55 as noting charges.
The second bill was retired on 4th May, 2009 under a rebate of 6% p.a. with mutual agreement.
Journalise the above in the books of Leena and Meena.

Briefly explain the benefits of maintaining a Bills Payable Book and state how is its posting is done in the ledger?

A sold goods to B for ₹ 60,000 Charging IGST @18% and immediately drew a bill on Bwho duly accepted the same. A endorsed the bill to C. C endorsed it to his creditor D. Ddiscounted the bill for ₹ 68,000. On the date of maturity, the bill was dishonoured and Bank paid noting charges amounting to ₹ 200.
Show Journal entries in the books of all the parties to record these transactions.

Calculate the due dates of the bills in the following cases:

Date of Bill		Tenure (Period)
(i)	1st December, 2018	60 Days
(ii)	30th April, 2019	2 Months
(iii)	28th January, 2019	1 Month
(iv)	23rd November, 2018	2 Months
(v)	29th May, 2018	4 Months

Briefly explain the purpose and benefits of retiring a bill of exchange to the debtor and the creditor.

What do you mean by dishonour of a bill? What entries will be made in the books of Drawer, if:

1. Bill is with the drawer himself.
2. Bill is discounted with the Bank.
3. Bill is with the endorsee.
4. Bill is sent to the Bank for collection.

Explain briefly the purpose and advantages of maintaining of a Bills Receivable Book.

X sells goods for ₹ 40,000 to Y on 1st January, 2019 and on the same day draws a bill on Y at three months for the amount. Y accepts it and returns it to X, who discounted it on 4th January, 2019 with his bank at 6% p.a. The acceptance is dishonoured on the due date and the noting charges were paid by bank being ₹ 200.
On 4th April, 2019, Y accepts a new bill at three months for the amount then due to X together with interest at 12% p.a.
Make Journal entries to record these transactions in the books of X.

Give the meaning of rebate.

Give the Journal entries for the following:

1. B's acceptance to us for ₹ 1,000 due this day, renewed at his request for 3 months with interest @ 6% p.a.
2. Our bill to Chandra for ₹ 5,000 renewed for 2 months with interest @ 6% p.a.
3. B's acceptance of ₹ 3,000 is discharged on his paying us cash ₹ 1,000 and accepting a fresh bill for the balance with interest ₹ 100.

Give a definition of Promissory Note and give its four characteristies.

On 1st April, 2016, B accepts a bill drawn by A at three months for ₹ 8,000 in payment of debt. On the due date the acceptance is dishonoured and A gets the bill noted paying ₹ 100. On 4th July, 2016 A draws a new bill payable after 73 days provided interest is paid in cash @ 15% p.a. To this B is agreeable. The bill is met on maturity.
Record these transactions in the Journal of both the parties.

Briefly explain the effects of dishonour and noting of a bill of exchange.

On 1st June, 2019, A sold goods to B for ₹ 250. B gave to A his acceptance payable 1 month after date. Before maturity B requests A to renew it, which A does adding ₹ 10 to the new bill for interest.
Make the necessary Journal entries to record these transactions in the books of both Aand B.

Define Bill of Exchange. What are the parties to a Bill of Exchange?

X draws on Y a bill for ₹ 4,000 which was duly accepted by Y. Y meets the bill on its due date. Show what entries would be passed in the books of X and Y under each of the following circumstances:

1. If X retains the bill till due date.
2. If X discounts the same with his banker paying ₹ 100 for discount.
3. If X endorses the same to his creditor Z, in full settlement of his debt of ₹ 4,080.
4. If X sends the bill to his banker for collection.

On 1st January, 2019, X sold goods of ₹ 20,000 to Y and drew a bill on Y at three months for the amount. Y accepted the bill. The bill is met on maturity. Pass the necessary Journal entries in the books of X and Y, if X discounted the bill @ 12% p.a. from bank on 4th January.

On Jan 01, 2016 Rao sold goods ₹ 10,000 to Reddy. Half of the payment was made immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after 30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill to Reddy and received the payment. Journalise the above transactions in the books Rao and prepare of Rao’s account in the books of Reddy.

On 1st March, 2019, R accepted a Bill of Exchange of ₹ 20,000 from S payable 3 months after date in full settlement of his dues. On the same day S endorsed the Bill of Exchange to T together with a cheque for ₹ 5,000 in settlement of his debt to the latter. On 2nd March, 2019, T discounted the Bill of Exchange @ 6% p.a. with his bank. On maturity the Bill of Exchange was dishonoured.
Journalise the transactions in the books of R and T.

Dinesh received from Shridhar an acceptance for ₹ 3,000 on 1st September, 2018 at 3 months. Dinesh got the acceptance discounted at 9% p.a. from his bank. On the due date, Shridhar paid the required amount.
Give the Journal entries in the books of Dinesh and Shridhar.

On Jan. 01, 2016 Arun sold goods for ₹ 30,000 to Sunil. 50% of the payment was made immediately by Sunil on which Arun allowed a cash discount of 2%. For the balance Sunil drew a promissory note in favour of Arun payable after 20 days. Since, the date of maturity of bill was a public holiday, Arun presented the bill on a day, as per the provisions of Negotiable Instrument Act which was met by Sunil. State the date on which the bill was presented by Arun for payment and Jounalise the above transactions in the books of Arun and Sunil.

On 1st January 2017, Amar sold goods to Akbar for ₹ 60,000. Akbar accepts two bills of ₹ 25,000 for 2 months, and ₹ 35,000 for 3 months.
The first bill was discounted from bank on 3rd January 2017 for ₹ 24,900 and 2nd bill endorsed to Anthony on 15th January 2017.
First bill was met on maturity but second bill got dishonoured and noting charges of ₹ 200 being paid. Amar charged ₹ 300 as Interest and drew another bill for the amount due for further 2 months. This bill was met on maturity.
Pass the necessary Journal Entries in the books of Amar, Akbar and Anthony.

On Feb 01, 2016, John purchased goods for ₹ 15,000 from Jimmi. He immediately made a payment of ₹ 5,000 by cheque and for the balance accepted the bill of exchange drawn upon him by Jimmi. The bill of exchange was payable after 40 days. Five days before the maturity of the bill, Jimmi sent the same to his bank for collection. The bank duly presented the bill to John on the due date who met the bill. The bank informed the same to Jimmi. Prepare John’s account in the books of Jimmi and Jimmi account in the books of John.

A sells goods of ₹ 10,000 on 1st March, 2019 to B on credit. B accepts a bill on the same date for the amount payable three months after date. A discounts the bill at 6% p.a. from bank on 4th April. On maturity, the bill is met by B. Pass the necessary Journal entries in the books of both the parties.

On 10th April, 2018, Ravi purchased from Mohan goods for ₹ 30,000 plus CGST and SGST @ 9% each. Ravi paid ₹ 15,400 in cash and accepted a bill for two months for the balance amount drawn on him by Mohan. Mohan endorsed the bill to Rakesh. The bill was dishonoured on the due date. Rakesh had to spend ₹ 100 as noting charges. Immediately after the dishonour, Mohan accepted a new bill drawn by Rakesh, in which ₹ 200 for interest were also included. After 20 days of the dishonour of the bill, Ravi paid full amount of Mohan including ₹ 50 as interest. Show Journal entries in the books of Ravi, Mohan and Rakesh.

Explain briefly the procedure of calculating the date of maturity of a bill of exchange? Give example.

A sold goods for ₹ 40,000 to B on Jan. 01, 2017. He drew upon B a bill of exchange for the same amount payable after 1 month. B accepted the bill and sent it back to A. Adiscounted the bill immediately with his bank @ 9% p.a. On the due date B dishonoured the bill of exchange and the bank paid ₹ 200 as noting charges. B requested A to draw a new bill upon him with interest @ 12% p.a. which he agreed. The new bill was payable after 1 month. One week before the maturity of the second bill B requested A to cancel the second bill. He further requested to accept ₹ 15,000 in cash immediately and draw a third bill upon him including interest of ₹ 1,000. A agreed to B's request. The third bill was payable after one month. B met the third bill on its maturity. Record the necessary journal entries in the books of A and B and also prepare B's account in the books of Aand A's account in the books of B.

On Jan. 1, 2017 Neha sold goods for ₹ 20,000 to Muskan and drew upon her a bill of exchange payable after two months. One month before the maturity of the bill Muskan approached Neha to accept the payment against the bill at a rebate @12% p.a. Neha agreed to the request of Muskan and Muskan retired the bill under the agreed rate of rebate.
Journalise the above transactions in the books of Neha and Muskan.

On Jan 01, 2016 Neha sold goods for ₹ 20,000 to Muskan and drew upon her a bill of exchange payable after two months. One month before the maturity of the bill Muskan approached Neha to accept the payment against the bill at a rebate @ 12% p.a. Neha agreed to the request of Muskan and Muskan retired the bill under the agreed rate of rebate. Journalise the above transaction in the books of Neha and Muskan.

On Jan. 15, 2017, Kusum sold goods for ₹ 30,000 to Pushpa and drew upon her three bills of exchanges of ₹ 10,000 each payable after one month, two months and three months respectively. The first bill was retained by Kusum till its maturity. The second bill was endorsed by her in favour of her creditor Khushboo and the third bill was discounted by her immediately @ 6% p.a. All the bills were met by Pushpa. Journalise the above transactions in the books of Kusum and Pushpa.

On 15th June, 2019, X sold to Y goods to the value of ₹ 15,000 drawing upon the latter two bills, one for ₹ 10,000 payable 2 months after date and other for ₹ 5,000 payable 3 months after date, X discounted the first bill with his bank at 6% p.a. and endorsed the second bill in favour of his creditor, Z. The first bill was met on maturity but the second was dishonoured. Z paid ₹ 50 as noting charges. On 1st October, Y cleared his account to X by paying ₹ 5,100 which included ₹ 50 as interest.
Record the necessary Journal entries in the books of both X and Y.

Manohar drew a bill of exchange on Pushkar, his debtor, for ₹ 20,000 on 1st March 2016 for 3 months. Pushkar accepted the same and returned it to the drawer. Manohar endorsed the bill to Yadu on 1st April 2016 for a debt of equal amount. Yadu discounted it with the bank at 15% p.a. on 1st May 2016. On the due date the bill was dishonoured. (Noting charges amounted to ₹ 100). Show the journal entries in the books of:

1. Drawer
2. Drawee/Acceptor
3. Endorsee

X draws upon Y a bill of ₹ 10,000 for three months on 1st July, 2016. The bill was duly accepted and returned by Y. On due date bill became dishonoured and noting charges paid under each of the following circumstances ₹ 75. Pass entries in the following cases:

1. If drawer retains the bill with him till due date.
2. If drawer discounts the same with his Banker and noting charges paid by the Banker.
3. If drawer endorses the same to his creditor Z and noting charges paid by Z.
4. If drawer sends the bill for collection to his Banker and noting charges paid by the Banker.

Vimal purchased goods ₹ 25,000 from Kamal on Jan. 15, 2017 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of the maturity the bill was duly presented for payment. Vimal dishonoured the bill.
Record the necessary journal entries in the books of Kamal and Vimal when:

1. The bill was retained by Kamal till the date of its maturity.
2. The bill was immediately discounted by Kamal with is bank @ 6% p.a.
3. The bill was endorsed by Kamal in favour of his creditor Sharad.
4. Five days before its maturity the bill was sent by Kamal to his bank for collection.

Mehak sold goods for ₹ 24,000 to Shally on July 31, 2017 and drew three bills for ₹ 6,000, ₹ 8,000 and ₹ 10,000 payable after two, three and four months respectively. The first bill was kept by Mehak with her till maturity date. She endorsed the second bill in favour of her creditor Kanak. The third bill was discounted on September 3, 2017 @ 12% p.a. from bank. The first and second bill were duly met on maturity but the third bill was dishonoured and the bank paid ₹ 150 as noting charges. On December 3, 2017 Shally paid ₹ 5,000 and noting charges in cash and accepted a new bill at two months after date for the balance amount plus interest ₹ 200. The new bill was met on maturity by Shally.
You are required to give the Journal Entries in the books of Mehak.

Vishal sold goods for ₹ 7,000 to Manju on Jan 05, 2016 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal’s draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank @ 12% p.a. On the due date Manju met her acceptance. Journalise the above transactions in the books of Vishal and Manju.

A sells goods for ₹ 30,000 to B on 1st January, 2017 and on the same day draws a bill on B at three months for the amount. B accepts it and returns it to A, who discounts it on 4th February, 2017 with his bank at 18% per annum. The acceptance is dishonoured on the due date, the noting charges paid by the bank being ₹ 200.
On 4th April, 2017, B accepts a new bill at two months for the amount then due to Atogether with interest at 12 per cent per annum. Make Journal entries to record these transactions in the books of A and B.

Journalise the following transactions in our books:

1. Our acceptance to Karan for ​₹ 4,500 renewed for 3 months on the condition that ₹ 2,500 is paid in cash immediately and a new bill to be drawn including interest @ 12% p.a.
2. A bill payable accepted in favour of Hari for ₹ 4,000 returned unpaid due to lack of instructions to the bank. Hari claims ₹ 4,050. (₹ 50 as noting charges), which is paid by cheque.