Bills of Exchange and Promissory Notes-Part 2/6 · PDF fileBills of Exchange and Promissory...
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Bills of Exchange and Promissory Notes-Part 2/6 CPT Section A Fundamentals of Accountancy Chapter 7 Unit 3 CA. Ajay Lunawat
Transcript of Bills of Exchange and Promissory Notes-Part 2/6 · PDF fileBills of Exchange and Promissory...
Bills of Exchange and Promissory Notes-Part 2/6
CPT Section A Fundamentals of Accountancy Chapter 7 Unit 3
CA. Ajay Lunawat
TERMS OF BILLS
Types of Bills
Bill At Sight Bill After Date
Bill At Sight
No time for payment is mentioned.
A promissory note or bill of exchange is payable on demand-
(a) when no time for payment is specified, or
(b) when it is expressed to be payable on demand, or at sight or on presentment.
Bill After Date
The instrument in which time for payment is mentioned.
A promissory note or bill of exchange is a time instrument when it is expressed to be payable • after a specified period. • on a specific day • after sight • on the happening of event which is certain to happen
Term of a Bill
After Sight
Date of Acceptance
After Date
Date of Drawing
CALCULATION OF DAYS
Due Date of Bills – Case 1
Example : A draws a bill on B for Rs. 5,000 payable on 21.08.2013
Due Date will be 21.08.2013
Payable on Specific Date
Due Date Specific Date
Due Date of Bills – Case 2
Example : A draws a bill on B for Rs. 5,000 on 21.08.2013 payable after 3 months
Due Date will be 21.11.2013
Payable at a stated number of month(s) after date
Due Date Date on which term of bill
expires
To be noted
Bill Date : 25.03.2013
Term of Bill : 2 Months
Due Date : 25.05.2013
The term shall expire on that day of the month which corresponds with the day on which the bill is dated.
To be noted
Bill Date : 31.03.2013
Term of Bill : 3 Months
Due Date : 30.06.2013
If the month in which the period terminates has no corresponding day, the period shall be deemed to expire on the last day of such a month.
Due Date of Bills – Case 3
Due Date Date which comes after adding stated number
of days
Payable at a stated number of days after date
Example – Case 3 A draws a bill on B for Rs. 5,000 on 21.08.2013 payable after 30 days
Due Date will be 20.09.2013
21.08.2013 + 30 days = Due Date
Due Date of Bills – Case 4
Due Date The preceding business day will be the due date
Due Date is a Public Holiday
Example – Case 4 A draws a bill on B for Rs. 5,000 on 15.07.2013 payable after 1 months
Since it is a PUBLIC HOLIDAY, Due Date will be 14.08.2013
15.07.2013 + 1 Month 15.08.2013
Due Date of Bills – Case 5
Due Date The next following day will be the due date
Due Date is an emergency / unforeseen holiday
Example – Case 5 A draws a bill on B for Rs. 5,000 on 10.07.2013 payable after 1 month. On 10.08.2013, it was declared as a emergency holiday
Since it is a unforeseen HOLIDAY, Due Date will be 11.08.2013
10.07.2013 + 1 Month 10.08.2013
Calculation of Dates
Date of Acceptance / Drawing
Term of Bill – Days / Months
Expiry / Due Date
Grace Days – 3 Days
Maturity Date
Example of Calculation of Dates
Date of Acceptance / Drawing
Term of Bill – Days / Months
Expiry / Due Date
Grace Days – 3 Days
Maturity Date
15.01.2012
3 months
15.04.2012
3 days
18.04.2012
Question No 1
On 1.1.2011, X draws a bill on Y for Rs. 20,000 for 3 months maturity date of the bill will be:
Answer (c)
a) 1.4.2011
b) 3.4.2011
c) 4.4.2011
d) 4.5.2011
Question No 2
X draws a bill on Y for Rs. 30,000 on 1.1.2011. X accepts the same on 4.1.2011 for period of 3 months after date. What will be the maturity date of the bill:
Answer (a)
a) 4.4.2011 b) 3.4.2011
c) 7.4.2011 d) 8.4.2011
Question No 3
X draws a bill on Y for Rs. 20,000 on 1.1.2011 for 3 months after sight, date of acceptance is 6.1.2011. Maturity date of the bill will be
Answer (b)
a) 4.4.2011
b) 9.4.2011
c) 7.4.2011
d) 8.4.2011
Question No 4
If the due date is a public holiday, what will be the due date of the bill:
Answer (b)
a) Following day b) Preceding day
c) The same day only d) One month later
Question No 5 On 16.6.2011 X draws a bill on Y for Rs. 25,000 for 30 days. 19th July is a public holiday, maturity date of the bill will be:
Answer (b)
a) 19th July
b) 18th July
c) 17th July
d) 16th July
Question No 6 On 15.8.2011, X draws a bill on Y for 3 months for Rs. 20,000. 18th Nov. was a sudden holiday, maturity date of the bill will be:
Answer (c)
a) 17th Nov
b) 18th Nov
c) 19th Nov
d) 15th Nov
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