Meaning of Promissory Note
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Bills of Exchange and Promissory NotesQ-2 | Bills of Exchange and Promissory NotesQuestion 4759 of 26
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Detailed Solution & Explanation
Meaning of Promissory Note: A Promissory note is:
an instrument in writing,
not being a bank note or currency note,
containing an unconditional undertaking (promise)
signed by the maker (promisor)
to pay a certain sum of money only to a certain person or to the order of a certain
person.
Under section 31(2) of the Reserve Bank of India Act a promissory note cannot be made
payable to bearer except by RBI &/or Central Government.
Key Concepts to Understand
More Questions from Bills of Exchange and Promissory Notes
A firm purchased a second-hand machinery on April 1, 2021 for 15,00,000 subsequent to which ₹ 2,00,000 were spent on its repairs and installation. On October 1, 2021 another machinery was purchased for 9,00,000 and cost of installing the machine in a new plant is ₹ 20,000. The firm also shifted the machinery purchased on April 1, 2021 to the new plant and incurred freight of 10,000. They adopted a policy of charging depreciation @ 12% per annum on diminishing balance method. On April 1, 2023 it was decided to change the method and rate of depreciation to straight line basis. On this date, the remaining useful life was assessed as 5 years for both the machines purchased with no scrap value. On October 1, 2023 the first machine become outdated and sold for 2,50,000. On the same date, another machinery was purchased for * 8,50,000. The estimated useful life of the machine is 10 years and residual value is ₹ 30,000. You are required to prepare the machinery account for the year ending March 31, 2024. [Jan. 2025, 10 Marks]
Bill of exchange and the various parties to it. [MTP Jan. 2025]
Retirement of bill [RTP Jan. 2025]; [MTP Jan. 2025]
Bill of Exchange and Promissory Note
A promissory note can be made payable to the bearer. [Sep. 2024, 2 Marks]
Promissory Note is different from Bill of Exchange because the amount is paid by the maker in case of former and by the acceptor in the later. [June 2024, 2 Marks]
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