Bills of Exchange | PAPER III – ACCOUNTING & FINANCIAL MANAGEMENT FOR BANKERS | MODULE A: ACCOUNTING PRINCIPLES AND PROCESSES
Bills of Exchange - Notes and MCQs Bills of Exchange - Brief Notes 1. Bills of Exchange A Bill of Exchange is a written, unconditional order by the drawer to the drawee to pay a specific sum of money to the payee, either on demand or at a fixed future date. 2. Types of Instruments of Credit Promissory Note: Written promise to pay. Bills of Exchange: Order to pay. Cheque: A bill drawn on a bank and payable on demand. 3. Term and Due Date of a Bill Term of Bill: Period for which the bill is drawn (e.g., 30 days, 3 months). Due Date: The date on which payment is to be made; it includes 3 days of grace after maturity. 4. Important Terms Drawer: Person who makes the bill. Drawee: Person on whom the bill is drawn. Payee: Person who receives the payment. Endorser: One who transfers the bill. Endorsee: The recipient of the transferred bill. 5. Ac...