alleryA bill of exchange requires, at its inception, how many parties?
- Four
- Five
- Two
- Three
Show answer and solution
Correct answer: D. Three
The drawer, drawee and payee are the three parties required when a bill is first drawn.
CA Foundation Bills of Exchange and Promissory Notes — practice questions — page 4
Explore 93 free Bills of Exchange and Promissory Notes questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.
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Showing questions 91–93 of 93.
A bill of exchange requires, at its inception, how many parties?Read the answer and worked solution →What does a promissory note contain that an IOU lacks?Read the answer and worked solution →What sets a demand promissory note apart from one payable at a fixed future date?Read the answer and worked solution →
Worked practice questions
What does a promissory note contain that an IOU lacks?
- Compulsory asset security
- No signature by maker
- A specific promise to pay
- Only a debt admission
Show answer and solution
Correct answer: C. A specific promise to pay
An IOU only admits a debt, whereas a promissory note adds a promise to pay along with a timeline for repayment.
What sets a demand promissory note apart from one payable at a fixed future date?
- A thirty-day maturity
- A fixed interest rate
- No specific maturity date
- Mandatory collateral
Show answer and solution
Correct answer: C. No specific maturity date
Such an instrument carries no specific maturity date and is due whenever the lender demands it.
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