# CIE Accounting Paper-2: Specimen Questions with Answers 95 - 97 of 103

## Passage

Mrs. Anthony sold goods worth £10000 to Mrs. Barker on Jan 1st 2016. Mrs. Anthony drew a bill on Mrs. Barker at three months for the full amount. Mrs. Barker accepted the bill and returned to Mrs. Anthony, who discounted the bill with a bank on 5th Feb 2016.@15 %. The bill was duly honored on maturity.

## Question number: 95 (2 of 5 Based on Passage) Show Passage

### Write in Short

State any two differences between a bill of exchange and a promissory note?

### Explanation

The differences between a bills of exchange and promissory note are as follows:

(i) There are 3 parties involved in a bill of exchange namely drawer, drawee and payee while only 2 parties maker and payee are involved in a promissory note.

(ii) The liability of the drawer is secondary in the bill of exchange while the liability of the maker is primary in a promissory note.

## Question number: 96 (3 of 5 Based on Passage) Show Passage

### Write in Short

What were the other options available to Mrs. Anthony other than discounting the bill with the bank?

### Explanation

The other options that were available to Mrs. Anthony were as follows:

(i) Retain the bill till the due date.

(ii) Send the bill to bank for collection

(iii) Discount the bill with some third party

(iv) Endorse the bill to a creditor.