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    Bills of Exchange

    Uploaded by

    Shobana. M PSGRKCW
    1) A bill of exchange is a negotiable instrument that contains an unconditional order to pay a fixed amount of money. It has a drawer, drawee, and payee. 2) The key parts of a bill of exchange are the date, term, amount, stamp, and parties. It must be in writing, signed, contain an unconditional order to pay money, and specify the sum and time of payment. 3) There are different types of bills including inland/foreign bills and demand/time bills. Bills of exchange can be used for debt settlement and provide credit periods for debtors. The holder can retain, discount, endorse, or collect bills of exchange.

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    © All Rights Reserved
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    Bills of Exchange

    Uploaded by

    Shobana. M PSGRKCW
    119 views21 pages
    1) A bill of exchange is a negotiable instrument that contains an unconditional order to pay a fixed amount of money. It has a drawer, drawee, and payee. 2) The key parts of a bill of exchange are the date, term, amount, stamp, and parties. It must be in writing, signed, contain an unconditional order to pay money, and specify the sum and time of payment. 3) There are different types of bills including inland/foreign bills and demand/time bills. Bills of exchange can be used for debt settlement and provide credit periods for debtors. The holder can retain, discount, endorse, or collect bills of exchange.

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    Bills of Exchange Ppt

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    1) A bill of exchange is a negotiable instrument that contains an unconditional order to pay a fixed amount of money. It has a drawer, drawee, and payee. 2) The key parts of a bill of exchange are the date, term, amount, stamp, and parties. It must be in writing, signed, contain an unconditional order to pay money, and specify the sum and time of payment. 3) There are different types of bills including inland/foreign bills and demand/time bills. Bills of exchange can be used for debt settlement and provide credit periods for debtors. The holder can retain, discount, endorse, or collect bills of exchange.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    119 views21 pages

    Bills of Exchange

    Uploaded by

    Shobana. M PSGRKCW
    1) A bill of exchange is a negotiable instrument that contains an unconditional order to pay a fixed amount of money. It has a drawer, drawee, and payee. 2) The key parts of a bill of exchange are the date, term, amount, stamp, and parties. It must be in writing, signed, contain an unconditional order to pay money, and specify the sum and time of payment. 3) There are different types of bills including inland/foreign bills and demand/time bills. Bills of exchange can be used for debt settlement and provide credit periods for debtors. The holder can retain, discount, endorse, or collect bills of exchange.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 21

    Bills Of

    Exchange
    Introduction
    Negotiable
    Instrument
     According To Section 13(1) Of The
    Negotiable Instrument Act, 1881,
    “ A Negotiable
    Instrument Means A Promissory Note,
    Bill Of Exchange Or Cheque Payable
    Either To Order Or To Bearer”
    Types Of Negotiable
    Instrument
     Recognized By  Recognized By
    Statute Usage Or
    Custom
    1. Bills Of
    Exchange 1. Hundis
    2. Promissory Notes 2. Share Warrants
    3. Dividend Warrants
    3. Cheques
    4. Bearer Debentures
    Bills Of Exchange
     According to section 5 of Negotiable
    Instrument Act,
     “A Bill Of Exchange is an instrument
    in writing containing an unconditional
    order, signed by the maker , directing a
    certain person to pay a sum of money
    only to or to the order of a certain person
    or to the bearer of the instrument”
    Specimen Of A Bill Of
    Exchange
    JAMMU

    27th Nov. 2006

    Three months after due date, pay XYZ or order, the


    Sum of Rs 1000(one thousand only) for value received. Stamp

    To,
    M/S ABC
    Gandhi Nagar
    Jammu
    Parts Of A Bill Of
    Exchange
     Date
     Term

     Amount

     Stamp

     Parties
    Special features
    1. A Bill Of Exchange is an instrument in writing
    2. It must be signed by the maker
    3. It contains an unconditional order
    4. The order must be to pay money and money only
    5. The sum payable must be specific
    6. The amount must be paid within a stipulated time
    7. The name of the drawee must be clearly mentioned
    8. It must be dated and stamped
    Parties to a Bill Of
    Exchange
    Normally there are three parties to
    bills of exchange
     Drawer

     Drawee

     Payee
    Parties to a Bill Of
    Exchange
    Drawer
    The person who draws or writes the
    Bill Of Exchange is called the
    Drawer. The Drawer must be the
    seller or creditor to whom the
    money is owing
    Drawee
     The Drawee is the person on
    whom the bill is drawn. He is
    the purchaser or debtor who is
    ordered by the Drawer to pay
    the amount
    Payee
     The person who has the right
    to receive the amount of the
    bill is called the Payee, the
    Payee may be a third person or
    the Drawer himself
    Advantages of Bill of
    Exchange
    1. A Bill of Exchange is used in settlement
    of debts
    2. It fixes the date of payment
    3. It is a written and signed
    acknowledgement of debt
    4. A debtor enjoys full period of credit
    5. A drawer can convert the bill into cash
    by getting it discounted with the bank
    Kinds of Bills Of
    Exchange

     Inland Bill  Foreign


    Bill
    Kinds of Bills Of
    Exchange

     Trade Bills Accommodatio


    n Bills
    Kinds of Bills Of
    Exchange

     Demand  Time Bill


    Bill
    Accounting Treatment of Bills of
    Exchnage
    The person can use the bill in following four
    ways
     He can retain till maturity.

     He can discounted it with the bank.

     He can endorse it to creditors.

     He can send it to bank for collection

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