Class 11 Accountancy TS Grewal Solutions Chapter 12 - Accounting for Bills of Exchange
FAQs on TS Grewal Class 11 Accountancy Chapter 12 Solutions
1. Who is the signatory to the promissory note?
A Promissory Note has two parties
A maker, also known as a drawer, is a person or corporation who produces or draws a promissory note with the promise to pay a certain sum specified in the note. Maker is also known as the promisor.
Payee: The individual who is the promissory note's beneficiary is referred to as the payee. In the preceding part, the concept of the 'Bill of Exchange' is described in-depth for Commerce students.
2. What is Bill exchange?
A bill of exchange is defined as "a document in writing conveying an unconditional command, signed by the creator, ordering a specific person to pay a certain amount of money only to, or to the order of, a specific person, or the bearer of the instrument." It is critical to have a documented bill of trade. Not merely a request, but a payment confirmation order must be included. There should be no conditions in the order. The amount of the bill of exchange should be determined.
3. What is the significance of promissory notes in the bill of exchange?
The meaning of a promissory note, according to the Negotiable Instruments Act of 1881, is "an instrument in writing (not a banknote or a currency note) containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or on the order of a specific person, or to the bearer of the instrument." A promissory note payable to the bearer, on the other hand, is prohibited under the Reserve Bank of India Act. As a result, a promissory note can't be paid to the bearer.'
4. Which are the parties involved in the bill of exchange?
Three parties are involved in a bill of exchange:
Drawer: The drawer creates a bill of exchange. The drawer is the person responsible for signing the bill. A bill of exchange can be drawn by a creditor who is owed money by the debtor.
The individual on whom the bill of exchange is drawn is referred to as the drawee. The drawee is the debtor who must pay the money to the drawer. Another term for him is 'Acceptor.'
Payee: The individual who must receive payment is referred to as the payee. The payee might be the drawer or a third party.
5. What is a Promissory note?
A promissory note is a written instrument (not a banknote or currency note) containing an unconditional guarantee signed by the author to pay a certain amount of money alone to or on behalf of a specific person, or to the bearer of the instrument. The Negotiable Instruments Act of 1881 defines a promissory note as "an instrument in writing (not a banknote or currency note) embodying an unconditional assurance signed by the maker to pay a specified quantity of money solely to or on the direction of a certain person, or to the holder of the instrument." The Reserve Bank of India Act, on the other hand, forbids promissory notes payable to the bearer. As a result, the holder of a promissory note cannot be paid.'