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PRESENTATION ON :-

BILL OF EXCHANGE 

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MEANING OF BIIL OF EXCHANGE:-

  • According to the Negotiable instrument act  1881 '' A bill of exchange is defined as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the bearer of the instrument ''. 

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FEATURES OF BILL OF EXCHANGE :-

Must be in writing.

Order to be make payment.

Order to make payment is unconditional.

Maker of bill of exchange must sign it .

Payment to be made must be certain .

Date on which payment made also be certain.

Bill of exchange must be payable to a certain person.

It must be stamped.

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PARTIES TO A BILL OF EXCHANGE:-

Drawer or creditor ( who writes the bill).

Drawee or debtor ( whom bill is drawn ).

Payee ( whom payment is made) .

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MEANING OF PROMISSORY NOTE:-

  • According to the Negotiable instrument act 1881 '' A promissory note is defined as an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.

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FEATURES OF PROMISSORY NOTE:-

Must be in writing.

Must contain unconditional promise to pay.

Sum payable must be certain .

Signed by the maker.

Payable to a certain person.

Properly stamped.

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PARTIES OF PROMISSORY NOTE :-

Drawer or debtor ( who writes the bill ) .

Drawee or creditor ( who pay the bill ).

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ADVANTAGES OF BILL OF EXCHANGE :-

Framework for relationships.

Certainty of terms and conditions.

Convenient means of credit.

Conclusive proof. 

Easy transferability.

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ACCOUNTING TREATMENT :-

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Thank you

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