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Class 11
Accountancy
Bill of Exchange
state the three parties involved in a bill of exch...

Question:
State the three parties involved in a bill of exchange.

Answer:

Drawer: He is seller or creditor entitled to receive money from someone. He writes or draws the bill and is known As drawer. The bill of exchange is signed by the drawer of the bill.
Drawer or Acceptor: He is the purchaser or the debtor on whom the bill is drawn and who is liable to pay the amount mentioned in the bill. He accepts to pay the amount by writing the word “Accepted” on the bill and then signs it. A bill is called a draft before it is accepted.
Payee: The person to whom the payment is to be made is called payee. The drawer himself or a third party may be the payee of the bill.

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Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
1. What is the amount of capital with which Mr. Sunrise started business?
2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
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Question:
State the three parties involved in a bill of exchange.

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Question:
State the three parties involved in a bill of exchange.