Accounting Treatment Bills Exchange Homework Help

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Indian legal system is quite friendly with the people doing business according to it. As per the negotiable instrument act introduced in 1981, in order to make a smooth channel of payment between the creditor and payee, an instrument called bill of exchange was introduced. With duly signed by the maker, this bill of exchange guarantees a certain amount of payment within a certain period of time. Mostly commerce students in school come across this term and by practicing this area they can get excellent knowledge of it. We deliver Accounting Treatment Bills Exchange homework Help to students who have certain dilemmas regarding the topic.

What is bill of exchange?

A business runs on two monetary payment methods, Credit and Cash. Whenever any goods is sold or bought and the payment is done immediately in hard currency, it is considered as cash payment. On the other hand if the same is done and the payment is delayed for future prospect, than it is considered in the category of credit. A businessman has to rely on the person to pay the credits on time but a system can be introduced for the comfort of both the parties. In order to avoid the delay and further anomaly in payment a set of protocol can be introduced which will bind both the parties as per law and makes it easy for the debt to be paid on time. This instrument is called as bill of exchange. They are also termed as promissory notes which contain an unconditional promise to pay a particular amount of money on or before a particular date.

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Features of bill of exchange

From the aforementioned definition of bill of exchange, it is quite certain to withdraw a few features of it. In order to make them understand to the students our experts from the Accounting Treatment Bills Exchange homework Help team has compiled them in a single thread.

• A bill of exchange must always be in written format
• It certainly defines the order to make payment
• In any case that bill of exchange should not be defied and should be unconditional
• There must be a signature of makers of bill of exchange
• A certain method of payment is to be defined in it
• A bill of exchange must be made in order to make a successful payment to a person
• The date or time limit should be defined in it to make it certain

Our Accounting Treatment Bills Exchange homework Help team says that a bill of exchange is no more than a draft until its acceptance is made by the debtor or someone over his/her behalf.

Parties to a bill of exchange

In our Accounting Treatment Bills Exchange homework Help we define that there are three certain parties required for a bill of exchange. They are

1. A drawer who is also called as the maker of the bill of exchange is the one who signs it. Our Accounting Treatment Bills Exchange homework Help team experts have been the real time sellers and creditors and know the bill of exchange inside out.

2. A drawee or debtor for whom the bill of exchange is drafted. He/she is also the purchaser of goods from the drawer.

3. Payee is considered to be the person who is responsible to receive the payment. Either the drawer can be the payee if he/she wishes to keep the bill of exchange with him/her till the time of the payment. The following conditions are required if there is a need to change the payee.

a. In case of bill discounted, payee is the person who discounted the bill.
b. The creditor can become the payee if the bill is endorsed in the favor of a creditor.
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