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By Accounting Mcqs No Comments

When bill discounted with the bank is dishonored?

A. Acceptor‘s Account is debited in the books of drawer
B. Bills Receivable Account is credited in the books of drawer
C. Bank Account is debited in the books of drawer
D. Bills Payable Account is debited in the books of drawer

When a bill discounted with bank has been dishonoured, the drawer debits the Acceptors Account (restores the acceptor status a debtor for the amount due) and credits the Bank Account or Cash Account (the amount he pays to bank). The acceptor debits the Bills Payable Account, the noting charges and credits the Drawer‘s Account (Restores the status quo of the creditor to whom he is due to pay). Hence option A. is correct. All other options are incorrect.

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Related Mcqs:

  1. Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business).

    A. Cash receipt journal
    B. Cash payment journal
    C. Cash book
    D. Financial statements

  2. 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

    A. Discounting of the bill with the bank
    B. Payment of the bill on due date
    C. Remitting or receiving the amount
    D. Sending the bill to bank for collection

  3. 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

  4. 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

  5. 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

  6. _________ Checks that are presented to bank but not yet credited by the bank.

    A. Unpresented checks
    B. Uncredited checks
    C. Outstanding checks
    D. Bounced checks

  7. The noting charges levied on dishonour of an endorsed bill by the Notary Public are to be borne by

    A. The drawer of the bill
    B. The person responsible for dishonour
    C. The holder of the bill
    D. The endorser of the bill

  8. How many parties are generally found in a Bill of Exchange?

    A. 4
    B. 2
    C. 3
    D. 5

  9. 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

  10. Which of these is not an essential feature of a bill of exchange?

    A. Unconditional
    B. Certainty of amount
    C. In writing
    D. Amount to be paid in foreign currency

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