Bill of Exchange Process Quiz

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What is the primary liability of the drawee after accepting a bill of exchange?

To negotiate the bill with the payee

To return the bill to the drawer for further instructions

To endorse the bill to a third party

To pay the amount mentioned in the bill unconditionally (correct)

Which of the following is an essential characteristic of a bill of exchange?

Must be payable to bearer on demand

Should not contain a definite order to pay

Should be verbally agreed upon instead of in writing

Must contain an express order to pay (correct)

Can a bill of exchange be made payable to 'bearer on demand' as per Section 31 of RBI Act, 1934?

No, it is invalid (correct)

Valid only if the order is to pay money and goods

Yes, it is valid

Only valid if the sum is certain

Who is responsible for signing a bill of exchange?

Drawer Signup and view all the answers

What happens if one person plays the role of both drawer and payee in a bill of exchange?

The bill will be considered invalid Signup and view all the answers

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 Signup and view all the answers

What is the essential characteristic of a bill of exchange that distinguishes it from a promissory note?

It is an unconditional order to pay. Signup and view all the answers

Which of the following is NOT a characteristic of a bill of exchange?

It is payable to the bearer on demand. Signup and view all the answers

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. Signup and view all the answers

Which of the following is NOT a characteristic of a bearer instrument?

It is payable to a particular person or order. Signup and view all the answers

Which of the following is NOT a characteristic of a bill of exchange?

It is payable on demand. Signup and view all the answers

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. Signup and view all the answers

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. Signup and view all the answers

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. Signup and view all the answers

According to the passage, what happens when the bill of exchange matures?

The drawer presents the instrument to the drawee for payment. Signup and view all the answers

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. Signup and view all the answers

Who is the 'payee' in the bill of exchange transaction described in the passage?

The drawer (Mr. Sam) Signup and view all the answers

Bill of Exchange Process Quiz

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Questions and Answers

What is the primary liability of the drawee after accepting a bill of exchange?

Which of the following is an essential characteristic of a bill of exchange?

Can a bill of exchange be made payable to 'bearer on demand' as per Section 31 of RBI Act, 1934?

Who is responsible for signing a bill of exchange?

What happens if one person plays the role of both drawer and payee in a bill of exchange?

What is the main difference between an invalid and a valid bill of exchange?

What is the essential characteristic of a bill of exchange that distinguishes it from a promissory note?

Which of the following is NOT a characteristic of a bill of exchange?

What is the key difference between a cheque and a bill of exchange?

Which of the following is NOT a characteristic of a bearer instrument?

Which of the following is NOT a characteristic of a bill of exchange?

What is the key difference between a promissory note and a bill of exchange?

What is the process of a bill of exchange according to the passage?

What is the key difference between a promissory note and a bill of exchange according to the passage?

According to the passage, what happens when the bill of exchange matures?

What is the key characteristic of a bill of exchange according to the Negotiable Instruments Act, 1881?

Who is the 'payee' in the bill of exchange transaction described in the passage?

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