BILL OF EXCHANGE

BILL OF EXCHANGE AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 1 BILL OF EXCHANGE Dr. T.K. Jain. AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 tkjainbkn@yahoo.co.in www.afterschool.tk, www.afterschoool.tk www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 2 WHAT IS A BILL OF EXCHANGE? • It is an instrument containing unconditional order signed by the maker directing certain party to make the payment of certain amount to certain party or to the bearer of the instrument. • It is of two types: 1. order 2. bearer • It is of two types : 1. real 2. accommodation • it is of two types: 1. date of payment fixed 2. sight bill. www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 3 Foreign bill… • • • • • • • A bill drawn on a foreign national party Or A bill a drawn out of our country. Or A bill drawn outside India but payable in India. Or A bill drawn outside India on a person outside India. AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 4 www.afterschoool.tk Essential elements of a bill… 1. 2. 3. 4. 5. 6. 7. Date Time Amount Parties Stamp For value received (consideration) Acceptance AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 5 www.afterschoool.tk Characteristics of a bill of exchange… It must be written Must be signed Parties must be certain It mst be stamped (stamp must be cancelled by the maker). 5. It must contain an order to pay. 6. It must be accepted by the party. www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 6 1. 2. 3. 4. What is a promissory note? • It is unconditional undertaking by the maker of the note that the maker will make the payment of cerain amount to certain person or to order on certain date. • Promissory note cannot be a bearer instrument. • It must be in writing www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 7 Difference between bill of exchange and promissory note… • Promissory note is a promise by one of the party that it would make the payment, but bill of exchange is an order to other party to make the payment. • Promissory note cannot be bearer, but a bill of exchange can be bearer also. • There are only 2 parties here : 1. maker 2. payee. ( in a bill of exchange. There are 3 parties : 1. payee, drawer, drawee). www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 8 Difference between bill of exchange & promissory notell 1. Liability of maker of promissory note is unlimited, but in case of bill, the liability of drawee is unlimited. www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 9 Entries on dishonour? In the books of drawee: • BP A/c dr. • Noting charges a/c dr. • to drawer a/c credit • (suppose the bill was for Rs. 1000, noting charges was for Rs 50, then drawer’s account will be credited by 1050, as ultimately drawee will bear this amount). www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 10 Computation of retiring partners’ interest in the firm should include the share of profit till the end of the accounting year. • False – it the share of retiring partner will be only till the date of his retirement. • Suppose, Goti retires on 30 April, then he cannot get profit till 31 March (end of the year), he will get profit only upto 30 April (it will be computed for this purpose). www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 11 (viii) Statement of affairs is similar to profit and loss account with all expenses on the debit side and all incomes on the credit side. • False : because it is similar to balance sheet containing assets on one side and liabilities on the other side. But in P& L account, we only find expenses, income and profit. www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 12 An Item of Rs. 7,000 relating to prepaid rent account was omitted to be brought forward, what to do ? • This is an asset and we have to make an entry for this. It will be a debit entry and we will again make entry for this and transfer it to rent account. • Rent A/c Dr. 7000 • To prepaid rent A/c 7000 • (thus prepaid rent account will be closed, and rent will go to p& l account). www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 13 About AFTERSCHO☺OL • PGPSE - World’s most comprehensive programme on social entrepreneurship – after class 12th • Flexible – fast changing to meet the requirements • Admission open throughout the year • Complete support from beginning to the end – from idea generation to making the project viable. www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 14 Branches of AFTERSCHO☺OL • PGPSE programme is open all over the world as free online programme. • Those who complete PSPSE have the freedom to start branches of AFTERSCHO☺OL • A few branches have already started one such branch is at KOTA (Rajasthan). www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 15 Workshop on social entrepreneurship • We conduct workshop on social entrepreneurship – all over India and out of India also - in school, college, club, association or any such place - just send us a call and we will come to conduct the workshop on social entrepreeurship. • These workshops are great moments of learning, sharing, and commitments. www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 16 FREE ONLINE PROGRAMME • AFTERSCHO☺OL is absolutely free programme available online – any person can join it. The programme has four components : • 1. case studies – writing and analysing – using latest tools of management • 2. articles / reports writing & presentation of them in conferences / seminars • 3. Study material / books / ebooks / audio / audio visual material to support the study • 4. business plan preparation and presentations of those plans in conferences / seminars www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 17 100% placement / entrepreneurship • AFTERSCHO☺OL has the record of 100% placement / entrepreneurship till date • Be assured of a bright career – if you join AFTERSCHO☺OL www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 18 Pursue professional courses along with PGPSE • AFTERSCHO☺OL permits you to pursue distance education based professional / vocational courses and gives you support for that also. Many students are doing CA / CS/ ICWA / CMA / FRM / CFP / CFA and other courses along with PGPSE. • Come and join AFTERSCHO☺OL www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS 19