Discounting the Bill

Q.

The following are some of the transactions of M/s Kishore & Sons as per Waste Book. Make out their Sales Book:

Sold to M/s Gupta & Verma on credit:

30 shirts @ 150

20 trousers @ 300

Less: Trade Discount @ 10%.

Sold old furniture to MIs Sehgal & Co. on credit 800

Sold 50 shirts on credit to M/s Jain & Sons @ 150 each.

Sold on credit to M/s Mathur & Jain

10 shirts @ 175

10 overcoats @ 500

Less: Trade Discount @ 10%.

Q.

From the following list of balances extracted from the books of Shri Sahiran Prepare a trial balance as on 31st March, 2016.

$\begin{array}{cccc}\text{Name of Accounts}& \text{Amt (Rs.)}& \text{Name of Accounts}& \text{Amt (Rs.)}\\ \text{Stork on 1st April, 2015}& 22,000& \text{Discount Received}& 20,000\\ \text{Purchases}& 2,57,500& \text{Long-term Borrowings}& 1,70,000\\ \text{Sales}& 3,61,800& \text{Provision for Doubtful Debts}& 5,000\\ \text{Carriage Inwards}& 300& \text{Provision for Depreciation on Machinery}& 5,000\\ \text{Carriage Outwards}& 120& \text{Bad Debts}& 600\\ \text{Return Inwards}& 23,500& \text{Stationary}& 420\\ \text{Return Outwards}& 2,000& \text{Insurance}& 340\\ \text{Debtors}& 32,000& \text{Wages and Salaries}& 18,500\\ \text{Creditors}& 17,400& \text{Investment}& 30,000\\ \text{Leasehold Premises}& 1,60,000& \text{Interest on Ivestment}& 2,700\\ \text{Equipment}& 2,00,000& \text{Cash and Bank Balance}& 1,240\\ \text{Repairs to Equipment}& 2,000& \text{Premises}& 60,000\\ \text{Depreciation}& 8,000& \text{Funiture and Fixiures}& 14,000\\ \text{Bills Receivable}& 840& \text{Miscellaneous Expenses}& 520\\ \text{Bills Payable}& 480& \text{Miscellaneous Income}& 140\\ \text{Bank Overdraft}& 1,50,000& \text{Loan from Axis Bank}& 25,000\\ \text{Interest on Overdraft}& 640& \text{Interest on above Loan}& 3,000\\ \text{Purchases Return}& 50,000& \text{Capital}& 70,000\\ \text{Discount Allowed}& 4,000& \text{Proprietor's Withdrawals (Drawings)}& 6,000\\ \text{Salaries}& 10,000& \text{Computers}& 9,000\\ & & \text{Goodwill}& 15,000\\ & & \text{Stock on 31st March, 2016 (not adjusted)}& 31,000\end{array}$

Q.

Record the following transactions in a journal.
(i) Received cash from Jaya for a bad debt written - Off last year Rs. 400.
(ii) Bought goods at the list price of Rs. 1, 00, 000 From Rani less 20% trade discount and 2% cash discount and paid 40% by cheque.
(iii) Sold goods ot Preeti at the list price of Rs. 2, 00, 000 less 20% trade discount and 2% cash discount and paid 50% by cheque.
(iv) Sold goods to Tanu for Rs.40, 000, allowing her a trade discount of 5% and a cash discount of 10% she paid $\frac{1}{4}th$ of the amount in cash at the time of purchase.

Q.

Encashing the bill before the date of its maturity is called :

1. Retiring the bill

2. Dishonor of the bill

3. Renewal of the bill

4. Discounting of bill

Q.

A company whose accounting year is the calendar year purchased on 1st April, 2009 machinery costing : 30, 000. It further purchased machinery on 1st Oct. 2009 costing : 20, 000 and on 1st July, 2010 costing : 10, 000.On 1st Jan., 2011 one third of the machinery installed, on 1st April, 2009 became obsolete and was sold for : 3, 000.

Show how the Machinery Account would appear in the books of company if depreciation is charged @ 10%p.a, on Written down Value Method. Prepare Machinery Account from 2009 to 2012. Show your workings clearly.

Or

From the following Transactions, Prepare cash book with cash and Bank columns:

2013

Feb. 1 Cash in hand : 7, 500 cash at Bank : 8, 000.

Feb. 3 Discount a bill receivable for : 6, 000 at 2% through Bank.

Feb. 5 Bought goods for : 2, 000 and paid by cheque.

Feb. 15 Paid Trade expense:120.

Feb. 16 Drew from Bank for office use : 1, 000.

Feb. 17 Sold goods for : 12, 500 and received a cheque.

Feb. 25 Paid Insurance : 100.

Feb. 27 Cheque received on 17th deposited in Bank.

Feb. 28 Received a cheque from John & co. : 6, 000.

Feb. 28 Purchased 100 NSC for : 100 at : 95 each and paid by cheque

Q.

If the bill is encashed from the bank before the date of maturity it is termed as

1. Holding till Maturity

2. Endorsing the Bill

3. Discounting the Bill

4. Bank

Q.

Ascertain the appropriate missing figure from the following information :

Bills receivables as on March 31, 2018 Rs. 20, 000,
Bills receivables as on March 31, 2017 Rs. 16, 000,
Bills collected Rs. 21, 000,
Bills receivable of Rs. 1, 00, 000 discounted with a bank at a discount of Rs. 4, 000,
Bills receivable of Rs. 50, 000 endorsed in favour of creditors.
Bills receivable (which were retained ) dishonoured Rs. 25, 000.

Q.

Discounting a bill of exchange means ?

1. Taking the amount from bank against the bill after bill due date

2. Taking the amount from bank against the bill before bill due date

3. None of these

4. Taking the amount from bank against the bill at the time of bill due date

Q. Encashing the bill before the date of its maturity is called as .

1. discounting of bill
2. honoring of bill
3. dishnonoring of bill
4. renewal of bill

Q.

On 1st April 2011, Rohan sold goods to Shyam for Rs. 30, 000 on credit against his acceptance for 3 months. Rohan discounted the bill with his bank on 4th May 2011 @ 9% per annum. Find out the amount of discounting charges.

1. Rs. 400

2. Rs. 350

3. Rs. 300

4. Rs. 450

Q.

Bansal Traders allow a trade discount of 10% on the list price of the goods purchased from them. Mohan traders, who run a retail shop made the following purchase from Bansal Traders.

Date Amt. (Rs)

Dec 21, 2005 1, 000

Dec 26, 2005 1, 200

Dec 18, 2005 2, 000

Dec 31, 2005 5, 000

For all the purchase, Mohan Traders drew a promissory note in favour of Bansal Traders payable after 30 days. The promissory note for the sale of December 21, 2010, was retained by Bansal Traders with them till the date of its maturity. The promissory note drawn on 26.12.2010 was discounted by Bansal Traders from their bank at 12% per annum. The promissory note drawn on December 28, 2010, was endorsed by Bansal Traders in favour of their creditor Dream Soaps in full settlement of a purchase amounting to Rs. 1, 900. On 25.01.2011, Bansal Traders sent the promissory note drawn on December 31, 2010, to their bank for collection.

All the promissory notes were met by Mohan Traders. Record the necessary journal entries for the above transactions in the books of Bansal Traders and Mohan Traders and prepare Mohan Traders account in the books of Bansal Traders and Bansal Traders account in the books of Mohan Traders.

Q. A bill received and encashed with the bank on the same day is knows as .

1. discounting the bill
2. bill at sight
3. noting of the bill
4. renewal of the bill

Q. When the drawer keeps the bill with himself till the date of maturity it is called __________.

1. Retaining the bill
2. Discounting the bill
3. Endorsing the bill
4. Sending the bill to bank for collection