Journal for Dishonour Incase of Discounting

Q.

What is the journal entry of drawings?

Q.

On checking Ram’s Cash Book with the Bank statement of his overdraft current account for the month of November, 2012, you find the following:

(i) Cash Book showed an overdraft of Rs 45, 000.
(ii) The payment side of the Cash Book had been under cast by Rs 1, 500.
(iii) A cheque for Rs 7, 500 drawn on his saving account has been shown as drawn on his current account.
(iv) Cheques amounting to Rs 70, 000 drawn and entered in the Cash Book had not yet been presented.
(v) Cheques amounting to Rs 60, 000 sent to the bank for collection, though entered in the Cash Book, had not been credited by the bank.
(vi) Bank charges of Rs 750 as per Bank Statement had not been taken into the Cash Book.
(vii) Dividends of Rs 25, 000 had been paid direct into the bank and not entered in the Cash Book. You are required to prepare a Bank Reconciliation Statement on 30th November, 2012.

Or

Enter the following transactions in cash book.

$\begin{array}{ccc}2013& & \text{Rs}\\ \text{Jan.01}& \text{Cash in hand}& 1,500\\ \text{Jan.05}& \text{Paid to Ram}& 300\\ \text{Jan.05}& \text{Discount allowed by him}& 10\\ \text{Jan.08}& \text{Purchased goods}& 400\\ \text{Jan.10}& \text{Received from R. Gupta}& 980\\ \text{Jan.10}& \text{Discount allowed}& 20\\ \text{Jan.16}& \text{Sold goods}& 400\\ \text{Jan.21}& \text{Paid to S. Sharma}& 295\\ \text{Jan.21}& \text{Discount received}& 5\\ \text{Jan.25}& \text{Paid wages}& 50\\ \text{Jan.31}& \text{Paid to Narayan in full settlement of his account which shows a credit}& \\ & \text{balance Rs 400}& 390\end{array}$

Q.

What are the 4 types of bills?

Q.

On dishonor of a discounted bill whom does the bank look for payment

1. Drawer

2. Payee

3. Endorser

4. Drawee

Q.

Who pays the noting charges in case of dishonor of bills of exchange sent for collection for bank?

1. Drawee

2. Drawer

3. Endorsee

4. Bank

Q.

Who Issues Promissory Note?

Q.

X draws a bill on Y for Rs. 20, 000 for 3 months on 01.01.2012. The bill is discounted with the banker at a charge of Rs. 100. At maturity the bill returned dishonored. In the books of X for dishonor the bank account will be credited by ______.

1. Rs. 10, 000

2. Rs. 25, 000

3. Rs. 20, 000

4. Rs. 30, 000

Q.

A bill of Rs. 12, 000 was discounted by B with the banker for Rs. 11, 880. At maturity the bill returned dishonored with noting charges of Rs. 20.
How much amount will the bank deduct from B's bank balance at the time of such dishonour?

1. Rs. 12, 000

2. Rs. 11, 900

3. Rs. 11, 880

4. Rs. 12, 020

Q. A purchases goods worth ₹ 6, 200 from B and gives him his acceptance for ₹ 6, 000 in full satisfaction. B purchases goods worth ₹ 10, 000 from C and endorses the bill to him, paying the balance by cheque. On maturity the bill is dishonoured, noting charges amounted to ₹ 100.
Give the Journal entries in the books of A, B and C.

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

Q.

When noting charges are paid by the bank at the time of dishonor of bill the Drawee credits :

1. Cash account

2. Bills Receivable account

3. Drawer`s account

4. None of the above

Q.

Who pays the noting charges when a bill which has been discounted with the bank is dishonored by the drawee?

1. Drawee

2. Payee

3. Bank

4. Drawer

Q. The hundi payable at sight is called Darshani hundi.

1. True
2. False

Q. On 1st January, 2018, X received from Y three Bills of Exchange for ₹ 6, 000; ₹ 8, 000; and ₹ 10, 000 for 6 months, 4 months and 3 months respectively. On 3rd January the first bill was discounted by X with his bankers at a discount of 5% p.a. On 1st February the 3rd bill was endorsed in favour of a creditor Z. The second bill was retained till the due date. On due dates all the three bills were dishonoured.
Show the necessary Journal entries in the books of X and Y.

Q. Dinesh received from Shridhar an acceptance for ₹ 3, 000 on 1st September, 2016 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.

Q.

Asha sold goods worth Rs. 19, 000 to Nisha on March 2, 2011. Rs. 4, 000 were paid by Nisha immediately and for the balance, she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank. On the due date, Nisha dishonoured the bill and the bank paid Rs. 30 as noting charges.
Record the necessary Journal entries in the books of Asha and Nisha.

Q. Y owes X ₹ 4, 000. On 1st January, 2017, Y accepts a 3 months bill for ₹ 3, 900 in satisfaction of his full claim. On the same date, it was endorsed by X to Z in satisfaction of his claim of ₹ 3, 980. The bill is dishonoured on the due date. Give the Journal entries in the books of X.

Q.

Ritesh and Naina were in need of funds temporarily. On August 1, 2010, Ritesh drew upon Naina a bill for Rs. 12, 000 for 4 months. Naina accepted the bill and returned to Ritesh. Ritesh discounted the bill at the rate of 8% per annum. Half amount of the discounted bill remitted to Naina. On the due date, Ritesh sent the required sum to Naina, who met the bill.

Journalise the transaction in the books of both the parties.

Q.

On 01.01.2012, X draws a bill on Y for Rs. 30, 000. At maturity, the bill is dishonoured and Y requests X to draw a fresh bill for 2 months together with 12 % p.a interest. Noting charges amount to Rs. 100. The amount of interest will be:

1. Rs. 600

2. Rs. 602

3. Rs. 598

4. Rs. 550

Q.

Bella borrowed $Rs49,000$ from a bank on $15thMarch2010$ and settled the account on $20thMay$ $2011$.How long did she take to return the money? What amount should she pay if the rate of interest is $15\%p.a.$?

Q.

What Are the Contents of the Bill of Exchange?

Q. When bill is sent to the bank for collecting the amount receivable on bill it is called ____________.

1. Retaining the bill
2. Discounting the bill
3. Endorsing the bill
4. Bill sent for collection

Q. What do you mean by Bank Rate?

Q. X draws a bill on Y for ₹ 2, 000 on 1st January, 2017, Y accepts the same and returns it to X. The bill was drawn by X in full settlement of a debt owing by Y amounted to ₹ 2, 050. X discounts the bill on the same date with the Central Bank of India for ₹ 1, 980. At maturity the bill was duly met by Y.
Give the entries in the books of X and Y.
Suppose the bill is dishonoured, what entries witll be passed?

Q. In the books of drawer, when the bill discounted with the bank gets dishonored, bank account shall be:

1. Debited
2. Credited

Q. State whether the following statement is True or False.
Noting charges are payable to the Notary public, in case of honour of a bill.

1. True
2. False

Q. On dishonour of a bill discounted the drawer gives credit to ________.

1. Noting charges A/c
2. Bills receivable A/c
3. Bank A/c
4. Drawee A/c

Q. Banks create credit ________________.

1. Out of nothing
2. On the basis of their securities
3. On the basis of deposits
4. On the basis of their total assets

Q. Question

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