State True or False with reason

1) Inland bill is one which is drawn in one country and payable in another country.
Ans:-  False.
 Reason
Inland bill means, a bill drawn, accepted, and made payable within the territory of one and the same, country. So, a bill is drawn in one country and payable in another country can’t be a inland bill.

2) Retirement of bill means payment of the bill before due date.
Ans:-  True
Reason
Payment of the bill, by the acceptor of the bill to the holder of the bill before the due date, is known as Retirement of the bill. So retirement of the bill means payment of the bill before the due date.

3) Drawee can transfer the ownership of the bill.
Ans:- False
Reason
 Drawee is a debtor. He has to pay the amount of the bill to its holder on the due date. Hence he cannot transfer its ownership to another person. Drawer can transfer the ownership of the bill as he is the owner of the bill.

4) Acceptance of bills without making any changes in the terms of the bill is called qualified acceptance.
Ans:- False.
Reason
Acceptance of the bill with some changes as regards the terms, amount, place, etc. of a bill is known as qualified acceptance. Acceptance of the bill without making changes as regards the term is called general acceptance.

5) Discounting is a device to convert the bill into its present value.
Ans:- True.
Reason
When the drawer or holder of the bill approaches the bank to discount the bill, the bank pays the bill amount after deducting a certain amount (which is known as discounting charges). It means the conversion of the bill into its present value in cash. So, we can say that discounting is a device to convert the bill into its present value.

6) A bill of exchange must be presented to the acceptor on the due date.
Ans:- True.
Reason.
To get the payment of the bill from the acceptor, the holder of the bill is required to present it to the acceptor on its due date. Acceptor either honours the bill or dishonours the bill.

7) If a bill is discounted by the holder, no entry is passed in his book when the bill is honoured on the due date.
Ans:- True.
Reason
 On discounting the bill the holder gives the possession of the bill to the bank. On the maturity date, the bank has to present the bill to the drawee to collect the payment. When discounted bill is honoured, the transaction takes place between drawee and bank.

8) Noting charges are to be borne by the drawer
Ans:-  False.
Reason
Noting charges are to be borne by the drawee only as due to his act of non-payment, the bill is dishonoured and the drawer is not able to get money on its due date.

9) If a bill is drawn payable ‘on-demand’ no grace days are allowed.
Ans:- True.
Reason
‘On-demand’ means the amount of the bill is to be paid by drawee immediately on presentation of the bill as no time period is mentioned on it. In demand bill 3 days grace are not allowed by law.

10) There are three parties to a promissory note.
Ans:- False
Reason
There are only two parties to a promissory note, i.e. Drawer or maker of the note and drawee or payee of the note.