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Bill of exchange definition
Bill of exchange 
As per the Indian Negotiable Instruments Act. 
1881
A Bill, of Exchange  is 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 order of, a certain 
person or to the bearer of the instrument.
Page 2


  
Bill of exchange definition
Bill of exchange 
As per the Indian Negotiable Instruments Act. 
1881
A Bill, of Exchange  is 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 order of, a certain 
person or to the bearer of the instrument.
  
CHARACTERISTICS OF BILL OF 
EXCHANGE
1. A bill must be in writing. So an oral order 
cannot be called a bill.
2. The bill must be addressed to a specific 
person.
3. The bill must be contain an order to pay 
money, not a request.
4. The amount shown in the bill must be definite 
and clear. 
5. The date of writing the bill must be clear in the 
bill.
6. The duration of the bill must be definite. 
                                                      
Page 3


  
Bill of exchange definition
Bill of exchange 
As per the Indian Negotiable Instruments Act. 
1881
A Bill, of Exchange  is 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 order of, a certain 
person or to the bearer of the instrument.
  
CHARACTERISTICS OF BILL OF 
EXCHANGE
1. A bill must be in writing. So an oral order 
cannot be called a bill.
2. The bill must be addressed to a specific 
person.
3. The bill must be contain an order to pay 
money, not a request.
4. The amount shown in the bill must be definite 
and clear. 
5. The date of writing the bill must be clear in the 
bill.
6. The duration of the bill must be definite. 
                                                      
  
PARTIES TO A BILL OF 
EXCHANGE 
Normally there are three parties to a bill of 
exchange .
1. Drawer of the bill.
2. Acceptor \Drawee \Payer of the bill. 
3.  Payee of the bill.
 
Page 4


  
Bill of exchange definition
Bill of exchange 
As per the Indian Negotiable Instruments Act. 
1881
A Bill, of Exchange  is 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 order of, a certain 
person or to the bearer of the instrument.
  
CHARACTERISTICS OF BILL OF 
EXCHANGE
1. A bill must be in writing. So an oral order 
cannot be called a bill.
2. The bill must be addressed to a specific 
person.
3. The bill must be contain an order to pay 
money, not a request.
4. The amount shown in the bill must be definite 
and clear. 
5. The date of writing the bill must be clear in the 
bill.
6. The duration of the bill must be definite. 
                                                      
  
PARTIES TO A BILL OF 
EXCHANGE 
Normally there are three parties to a bill of 
exchange .
1. Drawer of the bill.
2. Acceptor \Drawee \Payer of the bill. 
3.  Payee of the bill.
 
  
DETAIL OF A BILL OF 
EXCHANGE
                  1. AMOUNT
                  2. DATE 
                  3. PEROID
                  4. SIGNATURE
                  5. REVENEU STAMP
     
Page 5


  
Bill of exchange definition
Bill of exchange 
As per the Indian Negotiable Instruments Act. 
1881
A Bill, of Exchange  is 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 order of, a certain 
person or to the bearer of the instrument.
  
CHARACTERISTICS OF BILL OF 
EXCHANGE
1. A bill must be in writing. So an oral order 
cannot be called a bill.
2. The bill must be addressed to a specific 
person.
3. The bill must be contain an order to pay 
money, not a request.
4. The amount shown in the bill must be definite 
and clear. 
5. The date of writing the bill must be clear in the 
bill.
6. The duration of the bill must be definite. 
                                                      
  
PARTIES TO A BILL OF 
EXCHANGE 
Normally there are three parties to a bill of 
exchange .
1. Drawer of the bill.
2. Acceptor \Drawee \Payer of the bill. 
3.  Payee of the bill.
 
  
DETAIL OF A BILL OF 
EXCHANGE
                  1. AMOUNT
                  2. DATE 
                  3. PEROID
                  4. SIGNATURE
                  5. REVENEU STAMP
     
  
TYPES OF BILL EXCHANGE
1.Bill payable immediately on demand or bill at 
sight   
2. bill payable after a stipulated period or bill after 
time
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FAQs on PPT - Bills of Exchange - Accountancy Class 11 - Commerce

1. What is a bill of exchange?
Ans. A bill of exchange is a legal document that serves as a written promise by one party to pay a certain amount of money to another party at a specified future date or on demand.
2. What are the key components of a bill of exchange?
Ans. The key components of a bill of exchange include the names of the parties involved (drawer, drawee, and payee), the amount of money to be paid, the due date, and the signatures of the parties involved.
3. How does a bill of exchange work?
Ans. A bill of exchange works by the drawer issuing the bill to the drawee, who is obligated to pay the specified amount to the payee on the due date. The payee can either hold on to the bill until the due date or transfer it to another party by endorsing it.
4. What are the advantages of using a bill of exchange?
Ans. Using a bill of exchange provides several advantages, such as providing a written and legally binding agreement for payment, facilitating the movement of goods and services, and offering flexibility in terms of payment options and due dates.
5. What is the difference between a bill of exchange and a promissory note?
Ans. While both a bill of exchange and a promissory note are negotiable instruments, the key difference lies in the parties involved. In a bill of exchange, there are three parties: the drawer, the drawee, and the payee. In a promissory note, there are only two parties: the maker and the payee. Additionally, a bill of exchange is generally used in commercial transactions, while a promissory note is more commonly used for personal loans.
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