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Introduction to Financial Planning

The introduct...

Question

The introduction of promissory notes solved the problem of transactions.

A

short distance

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B

walking distance

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C

half mile

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D

long distance

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Solution

The correct option is D long distance
A promissory note is a written promise by one party to pay another party a certain sum of money either on demand or at a specified date. Promissory notes enabled an important feature of money called the transfer of value. Like coins, the promissory notes also gave people the power to purchase goods and services from one another without any obstacles.

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Q. The problem of double coincidence of wants is solved with the introduction of _____.

Q. Following was the position of debtor and creditor of Gautam as on

1.1.2011

Items	Debtors(Rs.)	Creditors(Rs.)
Babu	$5, 000$	-
Chanderkala	$8, 000$	-
Kiran	$13, 500$	-
Anita	$14, 000$	-
Anju	-	$5, 000$
Sheiba	-	$12, 000$
Manju	-	$6, 000$

The following transactions took place in the month of Jan

2011

2

Drew on Babu at two months after date at full settlement for Rs.

4, 800

.
Babu accepted the bill and returned it on

5.1.2011

4

Babu's bill discounted for Rs.

4, 750

8

Chanderkala sent a promissory note for Rs.

8, 000

payable three months after date.
Jan

10

Promissory note received from Chanderkala discounted for Rs.

7, 900

12

Accepted Sheiba draft for the amount due payable two months after date.
Jan

22

Anita sent his promissory note payable after two months.
Jan

23

Anita's promissory note endorsed in favour of Manju.
Jan

25

Accepted Anju's draft payable after the three months.
Jan

29

2, 000

in cash and a promissory note for the balance payable after three months.
Record the transactions in the proper subsidiary books.

Following was the position of debtor and creditor of Gautam as on 1.1.2017.

	Debtors	Creditors
	Rs	Rs
Babu	5,000	–
Chanderkala	8,000	–
Kiran	13,500	–
Anita	14,000	–
Anju	–	5,000
Sheiba	–	12,000
Manju	–	6,000

The following transactions took place in the month of Jan 2017:

Jan. 02	Drew on Babu at two months after date at full settlement for Rs 4,800. Babu accepted the bill and returned it on 5.1.2017.
Jan. 04	Babu’s bill discounted for Rs 4,750.
Jan. 08	Chanderkala sent a promissory note for Rs 8,000 payable three months after date.
Jan. 10	Promissory note received from Chanderkala discounted for Rs 7,900
Jan. 12	Accepted Sheiba draft for the amount due payable two months after date.
Jan. 22	Anita sent his promissory note payable after two months.
Jan. 23	Anita’s promissory note endorsed in favour of Manju.
Jan. 25	Accepted Anju’s draft payable after three months.
Jan. 29	Kiran sent Rs 2,000 in cash and a promissory note for the balance payable after three months. Record the above transactions in the proper subsidiary books.

Q. Which of the parties not included in promissory notes?

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

Date	Amount Rs
Dec.21, 2016	1,000
Dec.26, 2016	1,200
Dec.18, 2016	2,000
Dec.31, 2016	5,000

For all the purchases Mohan Traders drew promissory note in favour of Bansal Traders payable after 30 days. The promissory note for the sale of Dec. 21, 2016 was retained by Bansal Traders with them till the date of its maturity. The promissory note drawn on 26.12.2016 was discounted by Bansal Traders from their bank at 12% p.a. The promissory note drawn on Dec. 28, 2016 was endorsed by Bansal Traders in favour of their creditor Dream Soaps in full settlement of a purchase amounting to Rs 1,900. On 25.1.2017 Bansal Traders sent the promissory note drawn on Dec. 31, 2016 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.

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