17 Questions
What is the primary liability of the drawee after accepting a bill of exchange?
To pay the amount mentioned in the bill unconditionally
Which of the following is an essential characteristic of a bill of exchange?
Must contain an express order to pay
Can a bill of exchange be made payable to 'bearer on demand' as per Section 31 of RBI Act, 1934?
No, it is invalid
Who is responsible for signing a bill of exchange?
Drawer
What happens if one person plays the role of both drawer and payee in a bill of exchange?
The bill will be considered invalid
What is the main difference between an invalid and a valid bill of exchange?
Valid bills must contain an express order to pay, while invalid ones do not
What is the essential characteristic of a bill of exchange that distinguishes it from a promissory note?
It is an unconditional order to pay.
Which of the following is NOT a characteristic of a bill of exchange?
It is payable to the bearer on demand.
What is the key difference between a cheque and a bill of exchange?
A cheque is always payable on demand, whereas a bill of exchange may not be.
Which of the following is NOT a characteristic of a bearer instrument?
It is payable to a particular person or order.
Which of the following is NOT a characteristic of a bill of exchange?
It is payable on demand.
What is the key difference between a promissory note and a bill of exchange?
A promissory note is signed by the maker, whereas a bill of exchange is signed by the drawer.
What is the process of a bill of exchange according to the passage?
The seller sells goods to the buyer and draws a bill of exchange on them.
What is the key difference between a promissory note and a bill of exchange according to the passage?
A promissory note is a promise to pay money, while a bill of exchange is an order to pay money.
According to the passage, what happens when the bill of exchange matures?
The drawer presents the instrument to the drawee for payment.
What is the key characteristic of a bill of exchange according to the Negotiable Instruments Act, 1881?
It is an unconditional order to pay money.
Who is the 'payee' in the bill of exchange transaction described in the passage?
The drawer (Mr. Sam)
Test your knowledge on the process of a bill of exchange, from the seller selling goods to drawing a BoE, acceptance by the drawee, and completion of the transaction. Questions based on The Negotiable Instruments Act, 1881.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
