SSC CGL Finance – Bills of Exchange – Level 2 · Exam Level · Paper III Sprint

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SSC CGL Finance – Bills of Exchange – Level 2 · Exam Level · Paper III Sprint – 15 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Statement-based
I. A cheque is a bill of exchange drawn on a specified banker and payable on demand.
II. Days of grace are allowed on a cheque.
Which is/are correct?

Correct Answer: D [Only I]

Explanation:

s. 6 defines a cheque; no grace on demand instruments.

2.  
A bill dated 31 March 2026 is payable 2 months after date. Its due date is:

Correct Answer: A [3 June 2026]

Explanation:

31 May 2026 + 3 days = 3 June 2026 (Wednesday).

3.  
A bill dated 29 June 2026 is payable 3 months after date. Its due date is:

Correct Answer: C [1 October 2026]

Explanation:

29 Sept + 3 = 2 Oct (Gandhi Jayanti, a public holiday) → 1 October.

4.  
Gita discounted Hari's acceptance with her bank. On maturity it was dishonoured. Gita will credit:

Correct Answer: B [Bank Account]

Explanation:

Holder at maturity = bank → Hari Dr, To Bank.

5.  
In the acceptor's books, the entry on dishonour of his acceptance (no noting) is:

Correct Answer: B [Bills Payable A/c Dr, To Drawer's A/c]

Explanation:

The liability on the bill is cancelled and the debt to the drawer revives.

6.  
A bill of ₹ 25,000 is dishonoured (noting ₹ 200). The acceptor pays ₹ 5,200 and accepts a new 3-month bill for the balance with interest at 12% p.a. The new bill is for:

Correct Answer: D [₹ 20,600]

Explanation:

20,000 × (1 + 12 × 3/1,200) = 20,000 × 1.03 = 20,600.

7.  
An acceptor owing ₹ 18,000 becomes insolvent and his estate pays 35 paise in the rupee. The bad debt is:

Correct Answer: A [₹ 11,700]

Explanation:

Cash = 6,300; bad debts = 18,000 − 6,300 = 11,700.

8.  
An acceptance of ₹ 24,000 is retired 2 months before its due date under a rebate of 15% p.a. The rebate is:

Correct Answer: C [₹ 600]

Explanation:

24,000 × 15 × 2 ÷ 1,200 = 600.

9.  
Match the followingMatch the instruments with their NI Act sections:
P. Promissory note Q. Bill of exchange R. Cheque
1. Section 6 2. Section 4 3. Section 5

Correct Answer: A [P-2, Q-3, R-1]

Explanation:

4 – note, 5 – bill, 6 – cheque.

10.  
Assertion–Reason
A: Noting charges paid on dishonour are finally recovered from the acceptor.
R: The dishonour is caused by the acceptor's default.

Correct Answer: C [Both A and R are true and R explains A]

Explanation:

The defaulting acceptor bears the cost of dishonour.

11.  
Two-quantity comparison
Quantity I: discount on ₹ 36,000 for 2 months at 10% p.a.
Quantity II: discount on ₹ 24,000 for 3 months at 10% p.a.

Correct Answer: C [Quantity I = Quantity II]

Explanation:

36,000 × 10 × 2 ÷ 1,200 = 600; 24,000 × 10 × 3 ÷ 1,200 = 600 → equal.

12.  
A bill drawn on 5 February 2026, payable 1 month after sight, is accepted on 20 February 2026. Its due date is:

Correct Answer: D [23 March 2026]

Explanation:

Count from acceptance: 20 March + 3 days = 23 March 2026 (Monday).

13.  
When a bill sent to the bank for collection is dishonoured, the drawer credits:

Correct Answer: B [Bills Sent for Collection Account]

Explanation:

Holder-at-Maturity Rule: the bill sat in 'Bills sent for collection'.

14.  
Arrange in orderArrange the life of a trade bill in order: (1) discounting with a bank (2) acceptance by the drawee (3) drawing by the seller (4) payment on the due date

Correct Answer: D [3, 2, 1, 4]

Explanation:

Drawn → accepted → discounted → paid at maturity.

15.  
Spot My Mistake“A bill dated 20 April 2026 at 2 months after date is due on 20 June 2026.” The correct due date is:

Correct Answer: C [23 June 2026]

Explanation:

Days of grace were forgotten: 20 June + 3 = 23 June 2026 (Tuesday).

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
Here you get the answer with a one-line explanation. 1,064 original questions with worked answers · Part A Finance & Accounts and Part B Economics & Governance notes · practice sets + 3 mock tests
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