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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
AFTERSCHO☺OL's MATERIAL
MATERIAL 1
FOR PGPSE PARTICIPANTS
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
AFTERSCHO☺OL's MATERIAL
MATERIAL 2
FOR PGPSE PARTICIPANTS
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 3


FOR PGPSE PARTICIPANTS
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.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 4


FOR PGPSE PARTICIPANTS
Essential elements of a bill…

1. Date
2. Time
3. Amount
4. Parties
5. Stamp
6. For value received (consideration)
7. Acceptance

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 5


FOR PGPSE PARTICIPANTS
Characteristics of a bill of exchange…

1. It must be written
2. Must be signed
3. Parties must be certain
4. 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 6


FOR PGPSE PARTICIPANTS
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 7


FOR PGPSE PARTICIPANTS
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 8
FOR PGPSE PARTICIPANTS
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 9


FOR PGPSE PARTICIPANTS
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 10
FOR PGPSE PARTICIPANTS
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 11
FOR PGPSE PARTICIPANTS
(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 12


FOR PGPSE PARTICIPANTS
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 13
FOR PGPSE PARTICIPANTS
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 14
FOR PGPSE PARTICIPANTS
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 15


FOR PGPSE PARTICIPANTS
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 16


FOR PGPSE PARTICIPANTS
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 17


FOR PGPSE PARTICIPANTS
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 18


FOR PGPSE PARTICIPANTS
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 19


FOR PGPSE PARTICIPANTS