The drawer of a trade bill passes relevant entries with regard to the transaction involved in it. But, in case of an accommodation bill, he passes an entry in addition to the usual entries. The additional entry so passed is with respect to

Related Mcqs:

1. Under which of the following situations, is journal entry not passed in the books of the drawer?

   A. When a discounted bill is honoured by the drawee on the due date
   B. When a bill is sent to the bank for collection
   C. When a bill is renewed at the request of the drawee
   D. When a debtor accepts a bill drawn by the drawer

2. In the books of the drawer, the accounting treatment involved on receipt of a bill of exchange duly accepted by the drawee is?

   i. Debit Bills Receivable Account
   ii. Debit Drawee‘s Account
   iii. Credit Drawee‘s Account
   iv. Credit Sales Account

   A. Only (i) above
   B. Both (ii) and (iv) above
   C. Both (i) and (iii) above
   D. Both (i) and (iv) above

3. Which of the following entries is correct in respect of reserve for discounts on accounts payable?

   A. Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c
   B. Debit Accounts Payable A/c and Credit P&L A/c
   C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
   D. Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c

4. The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is

   A. The Trial Balance will not agree
   B. The balance of creditors is understated
   C. The purchases are understated
   D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

5. Closing entries are generally passed:

   A. At the time of opening new books of account
   B. At the time of closing the accounts
   C. During the course of accounting period any time
   D. After certification of accounts

6. Accommodation bills are generally for?

   A. Genuine trade reasons
   B. For mutual financial accommodation
   C. To help augment money supply
   D. All the three

7. A Bill of Exchange is drawn on 1st April, 2018 payable after 3 months. The due date of the bill is?

   A. 30th June,2018
   B. 1st July,2018
   C. 4th July,2018
   D. 4th August,2018

8. X draws a Bill of Exchange on Y for 10,000 on 1-1-2013 for 3 months. The due date of the bill will be_________?

   A. 4-4-2013
   B. 3-4-2013
   C. 1-4-2013
   D. 31-3-2013

9. Transferring entries from journal to ledger account is commonly known as____________?

   A. Recording
   B. Transferring
   C. Posting
   D. Entry making

10. Which of the following is true regarding closing entries?

    A. They must be followed by reversing entries
    B. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account
    C. They must be made after the reversing entries but before the adjusting entries
    D. They must be made after the adjusting entries but before the reversing entries