Retiring of the Bill refers to the situation where the drawee upon whom the bill of exchange is drawn settles his account with the drawer prior to the expiry date agreed in the bill. This scenario takes place when the drawee of the bill has availability of excess funds which he can use to meet … Read more
The acceptor of the bill in certain situations may find it hard to repay the amount of bill on the due date . In such a situation, therefore the acceptor may request the holder of the bill , to substitute the old one with a new bill , which then would allow the acceptor of … Read more
Dishonour of Bill – Meaning Dishonour of the bill , means that the drawee of the bill of exchange on the date of maturity is not able to make the payment for the bill. In such a situation, the holder of the bill can then recover the amount from the drawer , or any other … Read more
Accounting for Bills of Exchange intends to cover the entries in the books of Drawer and Drawee . As Per Negotiable Instrument Act 1881, Bill of Exchange has following characteristics : – It is a negotiable instrument , containing an unconditional order in writing It is signed by maker (creditor/drawer) and directs another person (debtor/drawee) … Read more
Discounting and Endorsement of the Bill Bill of Exchange: Under the Negotiable Instruments Act 1881, a bill of exchange is defined as a written instrument which contains an unconditional order, directing a certain person to pay a defined sum of money to a specified individual or on the order of a certain person or to … Read more
Maturity of Bill Maturity of bill is the date when the bill of exchange becomes due to be paid. To calculate this date, additional three days are added as a period of grace. Calculation of Due Date of Bill of Exchange Due Date of Bill of Exchange is calculated to find the date , on which … Read more
Advantages of Bill of Exchange: According to the Section 5 of the Negotiable Instruments Act, 1881, a bill of exchange is an instrument which is recorded in writing and which contains an unconditional order, which is signed by the maker, guiding someone in particular to pay a specific total amount of money just to, or … Read more
A promissory note is a signed document which contains a written guarantee or a promise to pay a specific amount to a specified individual at a specified date or on demand. In the Negotiable Instruments Act 1881, a promissory note is defined as an instrument recorded in writing (not being a currency note or a … Read more
Topic Bill of Exchange Subject Accountancy Category CBSE Class 11 Notes Bill of Exchange Under the Negotiable Instruments Act 1881, A bill of exchange is defined as a written instrument which contains an order, that is not moved by any conditions whatsoever, and it directs a certain person to pay a defined sum of money … Read more
Reserves Any amount set aside from the profits of a business is known as reserve. The amount so kept separate is retained in the business to help in meeting the future growth and expansion objectives or any other future contingencies that might arise like compensation for workmen. Since, reserves are maintained by deducting the amount … Read more