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1.	Define a Promissory Note.
Answer» A Promissory note is an instrument in writing ( not being note or a currency note ) containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument .

2.	Explain the term Date of Matruity.
Answer» Date of Maturity means the date when the bill is due fro payment.

3.	Find the due datye of a Bill of Excahange dated 9th December, 2018 payable after 45 days.
Answer» 25th January, 2019 because 26th January is a public holiday. Reason: if maturity date falls on a day which is a public holiday or a gazatted holiday, the maturity date of the bill shall be the preceding business day.

4.	Who are the parties to a Bill of Exchange ?
Answer» Bill of Exchange has three parties namely Drawee. Drawer and payee.

5.	What is meant by Dishonour of a Bill of Exchange ?
Answer» Dishonour of Bill of Exchange means that the acceptance is not met ( paid) on maturity.

6.	Define the Bill of Exchange
Answer» Bill of Exchange is an instrument in writing containing an unconditional order signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order, of am certain person or to the bearer of the instrument.

7.	What are the different options available to the receiver of a Bill of Exchange ?
Answer» (i) Retain the Bill till maturity. (ii) Discounting the Bill with the Bank. (iii) Endore the Bill in favour of a creditor, and (iv) Send the Bill to Bank for collections.

8.	What is meant by Noting of Bill of Exchange gt
Answer» Noting of a Bill means getting the Bill notified and presented on its dishonour with the Notary public.

9.	Define a promissory Note. What are the features of a Promissory Note ?
Answer» According to section 4 of the Negotiable Instruments Act, 1881, a promissory note means “Promissory Note is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.” Features of a Promissory Note : 1) The promissory note must be in writing- Mere verbal promises or oral undertaking does not constitute a promissory note. The intention of the maker of the note should be signified by writing in clear words on the instrument itself that he undertakes to pay a particular sum of money to the payee or order or to the bearer 2) It must contain an express promise or clear undertaking to pay- The promise to pay must be expressed. It cannot be implied or inferred. A mere acknowledgment of indebtness is not enough. 3) The promise to pay must be definite and unconditional- The promise to pay contained in the note must be unconditional. If the promise to pay is coupled with a condition, it is not a promissory note. 4) The maker of the pro-note must be certain- The instrument should show on the fact of it as to who exactly is liable to pay. The name of the maker should be written clearly and ascertainable on seeing the document. 5) It should be signed by the maker- Unless the maker signs the instrument, it is incomplete and of no legal effect. Therefore, the person who promises to pay must sign the instrument even though it might have been written by the promisor himself. 6) The amount must be certain- The amount undertaken to be paid must be definite or certain or not vague. That is, it must not be capable of contingent additions or subtractions. 7) The promise should be to pay money- The promissory note should contain a promise to pay money and money only, i.e., legal tender money. The promise cannot be extended to payments in the form of goods, shares, bonds, foreign exchange, etc. 8) The payee must be certain- The money must be payable to a definite person or according to his order. The payee must be ascertained by name or by designation. But it cannot be made payable either to bearer or to the maker himself.It should bear the required stamping- The promissory note should, necessarily, bear sufficient stamp as required by the Indian Stamp Act, 1889. 9) It should be dated- The date of a promissory note is not material unless the amount is made payable at particular time after date. Even then, the absence of date does not invalidate the pro-note and the date of execution can be independently proved. However to calculate the interest or fixing the date of maturity or lmimitation period the date is essential. It may be ante-dated or post-dated. If post-dated, it cannot be sued upon till ostensible date. 10) Demand- The promissory note may be payable on demand or after a certain definite period of time. 11) The rate of interest- It is unusual to mention in it the rated of interest per annum. When the instrument itself specifies the rate of interest payable on the amount mentioned it, interest must be paid at the rate from the date of the instrument.

10.	Rebate is calculated for the period between date ofA. Payment and Maturity Date.B. Drawing and payment of BillC. Drawing and Maturing Date.D. none of these.
Answer» Correct Answer - a

11.	A promissory Note is made by the ….A. sellerB. purchaserC. endorseD. none of these.
Answer» Correct Answer - c

12.	Three days are added for ascertaining the date of maturity, these are Known as days of….A. maturityB. graceC. paymentD. none of these.
Answer» Correct Answer - c

13.	The party which is ordered to pay the amount is known as…A. drawerB. payeeC. draweeD. none of these.
Answer» Correct Answer - b

14.	A sells goods of ₹ 10,000 on 1st March, 2019 to B on credit. B accepts a bill on the same date for the amount payable three months after date. A discounts the bill at 6% p.a. from bank on 4th April.On maturity, the bill is met by B. Pass the necessary Journal entries in the books of both the parties.
Answer» Correct Answer - Discorunting charges = ₹ 100

15.	On 1st January , 2019 X sold goods of ₹ 20,000 to Y and drew a bill on Y at months of the amount. Y accepted the bill. The bill is met on maturity. Pass the necessary Journal entries in the books of X and Y , if X dicounted the bill @ 12% p.a. from bank on 4th January
Answer» Correct Answer - Discounting Charges= ₹ 600.