Please refer to Chapter 8 Bill of Exchange MCQ Class 11 Accountancy with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 11 Accountancy. Students should refer to MCQ Questions for Class 11 Accountancy with Answers to score more marks in Grade 11 Accountancy exams. Students should read the chapter Bill of Exchange and then attempt the following objective questions.

MCQ Questions Class 11 Accountancy Chapter 8 Bill of Exchange

Bill of Exchange MCQ Class 11 Accountancy provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question . On dishonor of a discounted bill whom does the bank look for payment
(a) Drawer
(b) Drawee
(c) Endorser
(d) Payee

Question. When bill is accepted without any condition to the order of drawer, it is called:
(a) Blank acceptance
(b) Qualified acceptance
(c) General acceptance
(d) Conditional acceptance

Question. If the bill is noted from notary public, it is called:
(a ) Accepting
(b) Noting
(c) Discounting
(d) None of them

Question. In case of term bill extra three days are given to acceptor are called?
(a) Days of bill payable
(b) Days if bill receivable
(c) Days of grace
(d) Days of tenor

Question. Which of the following is not true?
(a) There is no difference in appearance between trade and accommodation bill
(b) A bill of exchange must be accepted
(c) Drawee is maker of a bill
(d) Accommodation bill is for an imaginary transaction

Question. In case of retirement of bill, the rebate or discount is a revenue for the?
(a) Payee
(b) Holder
(c) Acceptor
(d) Drawer

Question. Narrations are given at the end of
(a) Final accounts
(b) Trial Balance
(c) Each Ledger account
(d) Each journal entry

Question. A promissory note is drawn by ______ in favor of _____
(a) Drawer, Drawee
(b) Maker, Payee
(c) Payer, Payee
(d) Drawer, Payee 

Question. A bill of exchange is an?
(a) A promise
(b) Unconditional order
(c) A request
(d) A order

Question. Who draws a bill of exchange?
(a) Creditor
(b) Debtor
(c) Holder
(d) None of the above

Question. When a drawer discounts a bill, he debits?
(a) Interest account
(b) Bank account
(c) Drawee account
(d) Bill receivable account

Question. A bill of exchange has parties
(a) 2
(b) 3
(c) 4
(d) 6

Question. Bill of exchange is a conditional order to pay the bill
(a) Within the month
(b) When the bank asks
(c) On due date
(d) When the drawer asks

Question. What is the Bill receivable account?
(a) Personal Account
(b) Machinery Account
(c) Real Account
(d) Nominal Account

Question. Encashing the bill before the due date is called from bank
(a) Endorsement
(b) Retirement
(c) Discounting
(d) Bills sent for collection

Question . What kind of acceptance is known as when the bill is accepted without any condition?
(a) Qualified acceptance
(b) Conditional acceptance
(c) Blank acceptance
(d) General acceptance

Question. A bill promise contains:
(a) A promise
(b) An unconditional order
(c) A request
(d) Endorsee

Question. The bills receivable book is a part of the:
(a) Journal
(b) Ledger
(c) Trading account
(d) Profit and loss account

Question. Kite-flying or kiting in an accommodation bill refers to the:
(a) Endorsement of the bill
(b) Retirement of the bill
(c) Discounting of the bill
(d) Renewal of the bill

Question Profit & Loss account is prepared for a period of one year by following
(a) Periodicity concept
(b) Business entity concept
(c) Accrual concept
(d) None of the above

Question. Petty cash is used for payment of
(a) Salaries & wages of the staff
(b) For purchase of assets
(c) Small expenses relating to postage’s and conveyance etc.
(d) All of the above

Question A minimum quantity of stock always held as precaution against out of stock situation is called
(a) Zero stock
(b) Risk stock
(c) Base stock
(d) None of the above

Question. Accommodation bills are also termed as …………. bills.
(a) Drawee bills
(b) Kite bills
(c) Payee bills
(d) Drawer bills

Question. Errors are _____ mistakes
(a) Intentional
(b) Undetected
(c) Unintentional
(d) None of the above

Question. Which reserve is not shown in the Balance sheet?
(a) Secret reserve
(b) General reserve
(c) Capital reserve
(d) All of the above

Question. The following error will affect the Trial Balance
(a) Error of partial omission
(b) Error of principle
(c) Error of complete omission
(d) All of the above

Question. The parties to joint venture are called
(a) Friends
(b) Principal and agent
(c) Partners
(d) Co-ventures

Question. A bill of exchange is an?
(a) A promise
(b) Unconditional order
(c) A request
(c) A request

Question. A bill of exchange is drawn by?
(a) Debtor
(b) Creditor
(c) Endorser
(d) Endorsee

Question. No journal entry is required to be passed when there is
(a) Loss by theft
(b) Normal loss
(c) Loss of bad debts
(d) Abnormal loss of business

Question. Capital expenditures are recorded in the
(a) Trading account
(b) Profit & Loss account
(c) Balance sheet
(d) All of the above

Question X draws a bill on Y. X endorsed the bill to Z. ____ will be the payee of the bill.
(a) X
(b) Y
(c) Z
(d) None of the above

Question. Bill receivable account is a :
(a) Machinery account
(b) Personal A/C
(c) Real A/C
(d) None of these

Question. A bill of exchange is drawn by:
(a) Debtor
(b) Creditor
(c) Holder
(d) All of the above

Question . The party who is entitled to receive the cash of a bill receivable is called
(a) Drawer
(b) Drawee
(c) Capitalist
(d) Bank

Question. Person to whom the bill is endorsed called ____
(a) Endorsement
(b) Endorser
(c) Endorsee
(d) None

Question. A bill payable on demand is called Time bill.

Question. A negotiable instrument is not freely transferable.

Question. …………….. days of grace are added in terms of the bill to calculate the date of its ………………….

Question. A bill of exchange must be accepted by the payee.

Question. A person who endorses the promissory note in favour of another is known as ………………

Question. The person to whom the amount mentioned in the promissory is payable is known as ………………….

Question There are ………………. parties to a bill of exchange.

Match The Following

Question. Identify–

i) Sold goods to Ram Rs 5000 at 10% trade discount and 2% cash discount, a bill is drawn for one month for the same. The final amount of bill will be	a) Rs 4,550
ii) Bill of Rs 5000 receivable after two months discounted @6% p.a., after discounting bank will pay	b) Rs 4,500
	c) Rs 4,410

Question. Identify–

i) A bill was drawn on 12thjune for two months then the maturity will be	a) 15th August
ii) A bill was drawn on 21st august for one month, if maturity date is Sunday, then the due date will be	b) 26th September
	c) 14th August
	d) 24th September

Question. Identify–

i) Which a/c is debited for recording of noting charges	a) Drawer a/c
ii) Which a/c is credited for the balance amount if goods are purchased and half amount is paid by cheque and for half we gave our acceptance	b) Accepter’s a/c
	c) Bills Payable a/c

Question. Identify–

i) Sales are calculated by adding	a) cash sales and received from debtors
ii) From incomplete records it is possible to prepare	b) cash sales + credit sales
	c) Ledger account
	d) Statement of affairs

Question. Identify–

i) Bill accept by drawee can transferred to	a) Endorsee
ii) The amount of bill dishonoured will be ultimately paid by	b) Bank
	c) Drawee

Question. Identify–

i) If bill is endorsed in the favour of creditor by drawer thenthe entry in the books of drawee will be	a) no entry in the booksof endorsee
ii) If bill is discounted by drawer from bank then the journal entry in the books of endorsee will be	b) no entry in the books of drawee

Question. Match the journal entries of bill endorsed by drawer in favour of creditor- Transactions In books of Drawer

i) Endorsing the bill	a) Dr. Debtors A/c (Cr) Sales A/C
ii) On maturity of bill	b) Dr.Creditors A/C(Cr.) B/R A/C
	c) Dr. B/R A/C (Cr.) Debtors A/C
	d) No Entry

Question. Bill draws on

i) 1st July (for Two month)	a) 4th Sep.
ii) 15th July ( for Three months)	b) 4th Dec.
iii) 1st August (for four months)	c) 18th Oct.

Question. Match the amount of renewed bill-

i) Bill of 2,000 renewed for two months @ 10% p.a. interest	a) Rs. 5,500
ii) Bill of 5,000 Renewed for 3 months @ 10% p.a. interest	b) Rs. 2,023
	c) Rs. 2,200
	d) Rs. 5,125

Question. Match the amount of renewed bill-

i) Bill of 2,000 renewed for two months @ 10% interest	a) Rs. 5,500
ii) Bill of 5,000 Renewed for 3 months @ 10% interest	b) Rs. 2,023
	c) Rs. 2,200
	d) Rs. 5,125

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