Bills Payable and Enfacement Overview
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Questions and Answers

What should not be entered in the Register of Bills?

  • Bills for internal check
  • Bills payable in cash
  • Bills adjusted in accounts (correct)
  • Bills submitted by Accounts Officers

What is the purpose of the enfacement on bills?

  • To show the total amount due to the vendor
  • To present bills in a summarized format for approval
  • To indicate the deductions made (correct)
  • To cancel incorrect claims

Who should sign the Accounts Office enfacement if the main Accounts Officer is unavailable?

  • Another Accounts Officer
  • The Treasurer of the office
  • Any Section Officer
  • The Section Officer (Accounts) (correct)

Which form is used for the Accounts Office enfacement?

<p>Form A. 1106 (D)</p> Signup and view all the answers

What is the main objective of the Abstract of Bills Passed?

<p>To condense bills for cheque signature approval (A)</p> Signup and view all the answers

What should be indicated above the enfacement in the case of bills requiring payments through another Accounts Officer?

<p>Not to be included in A. 1107 (A)</p> Signup and view all the answers

Which entry should be sufficiently full and clear in the Abstracts of Bills Passed?

<p>Details of each bill and voucher (A)</p> Signup and view all the answers

What should be done with a cheque that has expired after three months from its issue date?

<p>It should be returned to the drawer for destruction. (C)</p> Signup and view all the answers

How should the cancellation of a cheque be documented?

<p>On the cheque counterfoil and making an entry in the cash book. (B)</p> Signup and view all the answers

What action should be taken if a cheque is lost and the cheque's currency has expired?

<p>The drawer must still notify the bank to stop payment. (A)</p> Signup and view all the answers

What must be included on the counterfoil of a new cheque issued after the original is lost?

<p>Details of the new cheque including its number and date. (B)</p> Signup and view all the answers

After cancelling a cheque, how should the cash book entry be adjusted?

<p>It should reflect the cheque amount only as a 'Refund of Expenditure'. (D)</p> Signup and view all the answers

What should be done when an Officer authorized to sign cheques is relieved of that duty?

<p>Intimate all banks and treasuries. (C)</p> Signup and view all the answers

What is the implication of the phrase 'under thirty rupees' on a cheque?

<p>The cheque is for a sum between twenty and thirty rupees. (B)</p> Signup and view all the answers

When is a cross entry not necessary on a cheque?

<p>When a special cheque writing machine is used. (A)</p> Signup and view all the answers

How should amounts in rupees only be written on a cheque?

<p>With 'only' inserted after the number. (D)</p> Signup and view all the answers

What should be done if a correction is necessary on a cheque?

<p>Cancel the incorrect entry in red ink and insert the correct one. (A)</p> Signup and view all the answers

What should the Cheque Disbursement Cell do after generating the Cheque Abstract?

<p>Send the Cheque Abstract Report and cheques to the RBI/SBI for payment (B)</p> Signup and view all the answers

How should cheques drawn in favor of Government officers and departments be crossed?

<p>A/c payee only - not negotiable. (B)</p> Signup and view all the answers

Which document generates a Disbursement Cell Number (DCN) for each Co-6 Bill?

<p>System generated document (A)</p> Signup and view all the answers

Which of these options is incorrect regarding cheque writing?

<p>Abbreviate amounts, for example, use 'eleven hundred'. (B)</p> Signup and view all the answers

What common form of fraud should be avoided when writing amounts on a cheque?

<p>Altering words and figures to change values inappropriately. (D)</p> Signup and view all the answers

What color ink should be used for entering the Disbursement Number on each bill?

<p>Red Ink (D)</p> Signup and view all the answers

What is required for each alteration made on a cheque?

<p>The Accounts Officer must attest the change. (C)</p> Signup and view all the answers

What action is taken upon the completion of cheque disbursements?

<p>Records of the number of cheques disbursed are maintained (C)</p> Signup and view all the answers

For cheques drawn in favor of private persons, what should be the default procedure?

<p>Cross them unless a specific request states otherwise. (D)</p> Signup and view all the answers

Whom does the Cheque Disbursement Cell send the Disbursement Report of a Day in duplicate?

<p>Post Audit Cell (A)</p> Signup and view all the answers

What is a required component of the Cheque Abstract Report sent to the Cheque Cell?

<p>Cheque numbers and total amount payable (A)</p> Signup and view all the answers

Which payment methods are correctly associated with cheque disbursement?

<p>NEFT, ECS, and Cash (C)</p> Signup and view all the answers

Which document should be stamped as 'Cheque issued'?

<p>Cheque Abstract (D)</p> Signup and view all the answers

What document is maintained for reconciliation with the Disbursement Report of the day?

<p>Cheque Abstract Report (C)</p> Signup and view all the answers

What role does the Cashier play in cash payments?

<p>The Cashier sends cheques for cash payments to the Pay office (A)</p> Signup and view all the answers

On which days should the Statement A. 1110 be prepared?

<p>11th, 21st, and the last day of each month (B)</p> Signup and view all the answers

What is the purpose of the Statement A. 1110?

<p>To ensure no delays occur in checking and passing bills (A)</p> Signup and view all the answers

Who should offer reasons for delays in passing the bills?

<p>Sections responsible for internal check (A)</p> Signup and view all the answers

What must be done with the prepared Statement A. 1110?

<p>It must be submitted to the Officer-in-charge for scrutiny (C)</p> Signup and view all the answers

What document is used for requisitioning cheques?

<p>Form A. 1111 (C)</p> Signup and view all the answers

Which institutions can cheques be drawn on?

<p>The Reserve Bank of India or its agent banks (B)</p> Signup and view all the answers

What should accompany Form A. 1111 when submitted?

<p>Abstracts of Bills Passed (A. 1107) (D)</p> Signup and view all the answers

For what reason will funds required for cash payments be obtained?

<p>Cheques drawn in favour of the Cashier (C)</p> Signup and view all the answers

What information is required in the Statement A. 1110 regarding each bill?

<p>Remarks of the Accounts Officer (C)</p> Signup and view all the answers

What is the Accounts Bill Number referred to as?

<p>AB No. (B)</p> Signup and view all the answers

Which of the following accurately describes bills which do not involve cash payments?

<p>They are adjusted in the accounts without actual cash settlement. (D)</p> Signup and view all the answers

What should happen to bills received during each month?

<p>They should be distinctly shown in the register. (D)</p> Signup and view all the answers

After a bill is checked, where should the passed amount be entered?

<p>In the appropriate column of the register. (D)</p> Signup and view all the answers

What is the purpose of maintaining a register of Bills?

<p>To track all types of bills submitted for payment. (A)</p> Signup and view all the answers

What action is necessary once a cash payment bill has been registered?

<p>Prepare an abstract based on the registered bills. (C)</p> Signup and view all the answers

In terms of payment recovery, how are 'Bills Recoverable' primarily defined?

<p>Bills recoverable from external parties. (C)</p> Signup and view all the answers

What should be done with the outstanding balance of amounts due from each party at the close of the year?

<p>They should be carried forward into the new register. (C)</p> Signup and view all the answers

What information must be included in the Register of Bills Recoverable for each party?

<p>Initials of the Accounts Officer responsible. (A)</p> Signup and view all the answers

What happens if the payment due date is not adhered to?

<p>Interest will be charged on the outstanding balance. (B)</p> Signup and view all the answers

Which part of the Register of Bills Recoverable outlines the specific charges against a party?

<p>Particulars of the charges (D)</p> Signup and view all the answers

What is the required action for changes regarding the terms and conditions of a claim?

<p>Make the changes in the register under the initials of the Accounts Officer. (C)</p> Signup and view all the answers

What must be included in the Disbursement Report of a Day generated by the Cheque Disbursement Cell?

<p>Disbursement Cell Number along with cheque details and total amount (B)</p> Signup and view all the answers

What action should be taken with the Cheque Abstract Report of the day?

<p>It must be reconciled with the Actual Receipt &amp; Payment figures (C)</p> Signup and view all the answers

Which of the following best describes the role of the Accounts Office in the cheque disbursal process?

<p>Generating Cheque Abstracts and managing cheque disbursement records (B)</p> Signup and view all the answers

What is the primary responsibility of the Post Audit Cell in the cheque disbursement process?

<p>To verify and acknowledge receipt of disbursement reports (D)</p> Signup and view all the answers

When should the Cheque Disbursement Cell maintain a register of cheques disbursed?

<p>Daily, to track the number of cheques issued (B)</p> Signup and view all the answers

Which document serves as the basis for the Cashier's entries in the Cash Book?

<p>Abstracts of Bills and Requisition for Cheques (A)</p> Signup and view all the answers

What distinguishes the NEFT/ECS cheque disbursement procedure from cash payments?

<p>NEFT/ECS payments are processed through banks and do not involve physical cheques (B)</p> Signup and view all the answers

What should be done with the cheque numbers and total amounts payable reported in the Cheque Abstract?

<p>They must be included in daily reconciliation with the disbursed amounts (A)</p> Signup and view all the answers

What critical information must be recorded on each bill processed by the Accounts Office?

<p>Disbursement Number, Date, and Amount (B)</p> Signup and view all the answers

What is a significant consequence of errors in the Disbursement Cash Book?

<p>Discrepancies in cheque reconciliation and accountability (A)</p> Signup and view all the answers

When should the Statement A. 1110 be compiled for the internal check?

<p>11th, 21st, and the last day of each month (D)</p> Signup and view all the answers

What should be included in the Statement A. 1110 for each bill?

<p>Remarks from the Accounts Officer about the bill (C)</p> Signup and view all the answers

Who is responsible for submitting statements with reasons for delays in passing bills?

<p>The Officer-in-charge of the sections (D)</p> Signup and view all the answers

What specific schedule is set for preparing the statements from the Register of Bills?

<p>11th, 21st, and the last day of each month (C)</p> Signup and view all the answers

What should be done if a cheque has not been presented within its valid period?

<p>It should be destroyed and a new cheque drawn. (A)</p> Signup and view all the answers

Which officer is responsible for scrutinizing submitted statements for unchecked bills?

<p>The Deputy Chief Accounts Officer (B)</p> Signup and view all the answers

Which action is required when a cheque needs to be cancelled?

<p>Record the cancellation on the cheque counterfoil. (B)</p> Signup and view all the answers

In what form must cheques be classified before submission for signature?

<p>Bank-wise (A)</p> Signup and view all the answers

How should a new cheque be documented in the cash book after the cancellation of the original cheque?

<p>It should be entered in red ink parenthetically. (D)</p> Signup and view all the answers

For what type of payments are cheques drawn in favour of the Cashier used?

<p>Payments in cash (A)</p> Signup and view all the answers

What should happen if a cheque reported lost has its currency expired?

<p>No acknowledgment of the Stop Order is required beyond postal acknowledgment. (D)</p> Signup and view all the answers

What kind of information is required in the statement for unchecked bills?

<p>A brief description of the bills (C)</p> Signup and view all the answers

What is necessary to do if there are delays in passing the bills according to internal checks?

<p>Provide reasons and submit for scrutiny (C)</p> Signup and view all the answers

What happens after the replacement of a lost cheque?

<p>The old cheque's details must be noted on the counterfoil of the new cheque. (C)</p> Signup and view all the answers

What is necessary to document when a cheque is cancelled?

<p>A counter-reference in the cash book is required. (A)</p> Signup and view all the answers

Who must be notified to stop payment if a cheque is reported lost?

<p>The Bank issuing the cheque. (A)</p> Signup and view all the answers

How long are cheques generally considered valid after their issue date?

<p>Three months. (C)</p> Signup and view all the answers

What should be done immediately upon the determination that a cheque payment has been stopped?

<p>Adjust the cash book to reflect the cancellation. (D)</p> Signup and view all the answers

Which statement is true regarding the registration of ‘Stop Orders’ for lost cheques?

<p>Only a postal acknowledgment is necessary if the cheque's currency has expired. (D)</p> Signup and view all the answers

Flashcards

Non-cash Bills

Bills received from other entities like Railways, Central/State Governments, which are not settled in cash but adjusted in accounts.

Register of Bills (A. 1104)

A register specifically designed to record and manage bills paid in cash.

Accounts Enfacement

The process of reviewing and approving bills before payment. It involves verifying the amount claimed, applying deductions, and determining the final payable amount.

Form A. 1106

A form used for recording the accounts enfacement details on a bill.

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Abstract of Bills Passed (A. 1107)

A document that aggregates the details of all approved bills to be paid in cash or by cheque. This helps streamline the payment process and minimizes the number of cheques issued.

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Internal Check

A process of internal review and verification within the Accounts Office to ensure the accuracy of the bill before it is enfaced.

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Post-Check System

A system where detailed checks and verifications of bills are performed after they have been processed, rather than beforehand.

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Statement of Unchecked Bills (A. 1110)

A form used to list bills that haven't been approved for payment yet, sorted by the office section where they were received.

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Reasons for Delay

The section responsible for internal check provides a reason for any delay in approving bills.

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Officer-in-charge of a section

The person in charge of a particular section in the Accounts Office.

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Cheque payment

Payment made by issuing a cheque to the payee or their bank.

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Agent Bank

A bank designated as the agent of the Reserve Bank of India.

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Cash payment

Payments made in cash by receiving the money in hand.

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Financial Adviser and Chief Accounts Officer

An official responsible for managing and overseeing all financial matters within an organization.

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Cross Entry on Cheques

When a cheque is written for a specific amount, it should be crossed with a phrase like "under thirty rupees." This indicates the cheque is for an amount less than Rs. 30 but not less than Rs. 20; the exact amount is determined by the payee.

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Purpose of Cross Entry

It helps prevent fraud by making it harder to alter the amount of the cheque. This is because the designated phrase "under ## rupees" specifies a range of amounts, making it difficult to modify the precise sum.

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Exception to Cross Entry

The cross entry is not required when the amount is typed or perforated by a special cheque writing machine. This assumes a higher level of security against alteration.

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Writing Amounts on Cheques

Never use shortened forms like "eleven hundred" for "one thousand one hundred" when writing the amount on a cheque. Always write the full amount in words.

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Indelible Ink for Cheques

A cheque should be written and signed using indelible ink only. This helps to prevent any modifications or erasures after the cheque is written.

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Correcting Errors on Cheques

If an error is made while filling out a cheque, it should be corrected properly. The incorrect entry should be canceled neatly in red ink and the correct entry should be inserted. This should be attested by the Accounts Officer.

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Crossing Cheques for Government

Cheques issued to government officers or departments in settlement of government dues must be crossed with the phrase "A/c payee only-not negotiable." This restricts payment to the designated recipient only and prevents the cheque from being transferred to someone else.

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Crossing Cheques in General

In general, it's good practice to cross all cheques issued to corporate bodies, firms, or private persons. This helps protect the payee by limiting their liability if the cheque is lost or stolen.

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Expired Cheque

When a cheque isn't presented within three months of issuance, it expires and needs to be canceled. The drawer should destroy the old cheque, record details on the counterfoil, and issue a new cheque. This process ensures proper accounting and tracking of payments.

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Stopping Payment of a Lost Cheque

If a cheque is lost or stolen, the drawing officer must inform the bank and request them to stop payment. They also need to record the stop order request and obtain written confirmation from the bank.

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Canceling a Cheque

When a cheque is canceled, the counterfoil should be marked, and the cheque itself should be destroyed if possible. If not, the drawer must ask the bank to stop payment. The amount of the canceled cheque should be recorded as a refund in the cash book.

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Duplicate Cheque Request

When a cheque is lost, a new cheque is requested in its place. The drawing officer should send a registered letter to the bank notifying them of the lost cheque and asking them to stop payment. They should also obtain confirmation from the bank that the stop order is in place.

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Recording New Cheques

A new cheque issued to replace a lost or expired cheque should be recorded on the counterfoil of the original cheque and vice versa. This ensures proper tracking and avoids duplicates.

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What is Disbursement Cell Number (DCN)?

The process of generating a unique number for each bill processed for payment, used for tracking and accounting purposes.

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What is Cheque Abstract Report?

A document summarizing details of bills approved for payment, including cheque numbers and total amount payable.

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What is the Cheque Disbursement Cell?

The Accounts Office section responsible for generating cheques and coordinating payment processes.

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What is Disbursement Report of a Day?

A detailed record of all payment transactions in a day, including the DCN, section code, bill amount, and total amount disbursed.

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What is Disbursement Cash Book?

A comprehensive record used by the Accounts Office to track all cash payments made.

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What is Reconciliation for Disbursement Report?

The process of matching and verifying the total amount disbursed with the cheque abstract report and cheque/bill figures.

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What is CO-7?

A form used to record the approval of bills for payment, signed by the concerned Bill passing section.

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What is 'Generating Cheque Abstract and Cheques'?

Generating cheques for various payment methods like NEFT, ECS, and third-party cheques, based on approved bills.

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What is Disbursing NEFT/ECS/Third Party cheques?

The process of delivering NEFT/ECS/Third Party cheques to the bank along with the encrypted file.

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What is Sending Cashier's Cheques?

Sending Cashier's cheques to the Pay office for arranging cash payments.

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Bill

Any document through which a claim is presented for payment. It can be 'Bill Payable' or 'Bill Recoverable'.

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Bill Payable

This bill needs to be settled with actual cash payment.

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Bill Recoverable

This type of bill doesn't involve cash payment; instead, it's adjusted in the accounts.

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Bills Payable Registration

All bills payable require registration in the Accounts Office, followed by checks and preparing abstracts.

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Abstract of Bills Passed

A summary of all bills approved for payment.

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Rules for Cheque Issuance

The detailed rules laid down in Chapter XIX of the Accounts Manual that govern the use and issuance of cheques in the Accounts Office.

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Cheque Drawers

Funds required for cash payments are obtained by cheques drawn in favour of the Cashier, while other payments are made by cheques drawn in favour of the payees/bank disbursing the payment.

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Cheque Preparation

Cheques should be prepared in accordance with the details furnished on the Abstract of Bills Passed (A. 1107, third page).

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Requisition for Cheques (A. 1111)

Cheques are classified bank-wise and submitted to the Officer authorized to sign cheques along with the Abstracts of Bills Passed (A. 1107). This form is used to request cheques.

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Register of Bills Recoverable (A. 1139)

A register designed to track all dues recoverable from parties for services rendered, materials supplied, or other purposes.

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CO-7

A form used to record details of bills approved for payment, signed by the bill-passing section.

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Cheque Validity

A cheque that remains valid for three months from its issuance date.

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Stop Order Confirmation

A written confirmation from the bank stating they have stopped payment on a lost or expired cheque.

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Disbursement Cell Number (DCN)

A unique number assigned to each bill for tracking and financial record-keeping purposes.

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Cheque Abstract Report

A summary document containing information about approved bills for payment, including cheque numbers and totals.

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Study Notes

Bills Payable

  • Bills are documents used to claim payment
  • Bills payable are those the railway has to pay
  • Bills recoverable are those payable by other parties
  • Some bills involve cash transactions, others just account adjustments
  • Bills settled by cash need registration, checks, and abstract preparation
  • Bills payable are numbered, dated, and sent for section-specific checks
  • A register (Form A. 1104) tracks all bills received monthly
  • Bills not payable in cash are recorded separately

Bills Enfacement

  • Bills need an enfacement (Form A. 1106) detailing the amount authorized, deducted, and balance payable
  • The enfacement should be signed by the concerned officer, if multiple officers exist, or the section officer (Accounts) can sign in the absence of the Accounts Officer
  • The designated officer is responsible for accurately indicating the head of account for the claim and deductions.
  • In some cases (bills paid by another officer), the notation "Not to be included in A. 1107" should be prominently displayed on the enfacement

Abstracts of Bills Passed

  • Bills passed for payment or by cheque are recorded in an abstract (Form A. 1107) for condensed status presentation
  • This abstract details bill details, amounts, and payee
  • The abstract should be for each bill, and the necessary accounts details
  • The officer signing the abstract must cross off entries from the original document

Abstract of Allocation

  • This abstract (Form A. 1108) summarizes debit and credit entries on bills for payment
  • A separate abstract is for each form A. 1107
  • The totals are consolidated into a daily abstract (Form A. 1109) for reduced daily postings to the cash transaction abstract

Statement of Unchecked Bills

  • All claims against the railway need prompt checking and payment
  • A statement (Form A. 1110) shows bills received but not processed by 1st, 11th, 21st, or last of month
  • The statement includes sections, reasons for delays, and comments from concerned officers
  • The statement is submitted to the relevant divisional or deputy chief accounts officer

Issue of Cheques

  • Payment methods are typically cash through the pay office or cheques
  • Cheques are issued by authorized accounts officers to banks approved by financial advisors
  • Cheque books must be kept safe and properly registered
  • Cheque details must include railway names for bank processing
  • Cheques should be classified by payment method (NEFT, ECS/NECS, third-party checks, cash)
  • Separate cheque books are required for each bank, head treasury, or sub-treasury. Accounts Officers must notify the relevant treasury or bank of the cheque book numbers

Specimen Signatures

  • Specimen signatures of authorized officers are required by banks and treasuries
  • This is important for cheque processing, to ensure proper authorization
  • The relieved officer must notify of any changes connected with this

Writing of Cheques

  • Cheques should have a cross-entry indicating the amount
  • No abbreviations like "eleven hundred" for "one thousand one hundred" are allowed
  • Cheques must be written in words and figures and should clearly display there are no paise
  • Cheques should be written in indelible ink only

Crossing of Cheques

  • Government officer cheques are crossed (payee only, not negotiable)
  • Cheques to other entities are crossed and designated "Not negotiable"
  • Special marking is required when the method of crossing cheques is required
  • If the payee is a bank or Treasury, the cheque should be crossed “account payee only, not negotiable”
  • Other cheques should be crossed with "and Co." with addition of "Not Negotiable"

Cheque Receipt

  • Accounts Officers should add "Received payment by credit transfer to..." statement before a cheque is sent for processing
  • This is to stop fraudulent payment appropriation
  • If the payee is authorized, special procedures and documentation are required

Date of Payment

  • Payment is deemed made on cheque presentation or on the date the payee (or their authorize) accepts the cheque
  • When payments are by postal or money order, the date is the mail receipt / despatch date respectively
  • This is valid unless explicitly mentioned otherwise

Government Drafts

  • These drafts are common for railways and other quasi-government activities
  • There are two forms: Reserve Bank and State Bank drafts
  • These are issued for expenses and are marked as 'Government account only', these should not be transferable
  • The minimum amount is Rs. 50
  • Applications are required with details of the payment purpose and the account is used only for bona fide activities

Authorization for Payments

  • If necessary, another account officer can handle a bill/liability
  • An official authorization letter/telegram/enfacement is required, signed by the head of department
  • A seal and signatures must be provided for any modifications
  • Records for the authorization must be kept for future use

Bills Recoverable

  • This register (Form A. 1139) records outstanding amounts from external parties, including dates and amounts, reasons for delays, and all relevant particulars.
  • The register is reviewed monthly
  • Bills' realization needs prompt action, handling delays, and specific attention to high-value or contentious bills
  • The bills payable register should be reviewed monthly to ensure proper handling of all parties involved in the bill process

Daily Cash Outgo

  • Daily cash outflows are recorded in a dedicated register (Form A. 1137) to keep track of subheads or demands, in a chronological manner
  • The totals of the cash outgo must be reported regularly to financial advisors
  • All bills passed for payment must be entered into the abstract. This serves as a chronological overview of the daily cash outflow

Duplicate Cheques

  • If a cheque is lost, a new one can be issued with an indemnity bond (Form A. 1125)
  • The lost cheque should be tracked, and its payment stopped
  • The new cheque's creation should be correctly reflected in the records and documents
  • A certificate stating that the lost cheque has not been received must be obtained before issuing a replacement.

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Description

This quiz covers the essentials of bills payable and enfacement, detailing how bills are processed within an organization like the railway. It explores the types of bills, registration processes, and the roles of various officers in managing these financial documents. Test your knowledge on the critical aspects of bill management and accountability.

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