Important Tips for Mastering the Bill of Exchange

This video tutorial covers the Bill of Exchange, explaining its parties, format, and preparation. It provides tips to avoid common mistakes and discusses calculating due dates. The tutorial also covers journal and ledger entries, and addresses special cases like discounting, dishonor, and insolvency. The session concludes with a summary of key concepts and tips.

How many parties are involved in a Bill of Exchange?

• One: Only the Drawer

• Four: Drawer, Drawee, Payee, and Bank

• Three: Drawer, Drawee, and Payee

• Two: Drawer and Drawee

What is the due date for a bill at sight?

• The date the bill is drawn

• The date the bill is accepted

• The date the bill is presented for payment

• The date the bill is endorsed

When calculating the due date, what is the difference between a period given in months and days?

• There is no difference

• Months are counted from the acceptance date, days from the drawing date

• Months are longer than days

• Days are counted from the acceptance date, months from the drawing date

What should be recorded if a bill is sent to the bank for collection?

• Only the interest rate

• Nothing, as it is not necessary

• Bank charges or commission, if details are provided

• Only the bill amount

Who bears the noting charges if a bill is dishonored?

• The drawer

• The endorsee

• The drawee

• The bank

What is the first step in the renewal of a bill?

• Pay the noting charges

• Calculate the rebate

• Draw a new bill

• Cancel the old bill

In the case of insolvency, what happens to the balance amount?

• It is written off as a bad debt

• It is paid by the bank

• It is ignored

• It is added to the new bill