Bill Of Exchange - 1 - Free MCQ Practice Test with solutions, SSC CGL

A bill of exchange consist of three parties namely:
i) Drawer 
ii) Drawee
iii) Payee.

The party upon whom the bill is drawn is called the drawee. He is the person to whom the bill is addressed and who is ordered to pay. He becomes an acceptor when he indicates his willingness to pay the bill.

• A person to whom money is paid or is to be paid, especially the person to whom a cheque is made payable. A payee is a party in an exchange who receives payment. The payee is paid by cash, check, or another transfer medium by a payer.
• The drawee is the party that pays the sum specified by the bill of exchange
• The drawer is the party that obliges the drawee to pay the payee. The drawer and the payee are the same entity unless the drawer transfers the bill of exchange to a third-party payee.

So, payee is the correct option.

Due date of a bill is only after the given period (in this case one month ) plus three days of grace . So the bill will be paid only after 1 month and 3 days i.e. on 3rd march.

Promissory Notes: A negotiable instrument is a document in writing. It is signed by a certain person who promises to pay another person a fixed sum of money on a fixed date.

Drawer (the person who had received B/R) because he had discounted the bill from the bank and now he's liable for it's dishonour. But later he can claim this amount from drawee.

3 days of grace are added to the period of bill while calculating the due date of the bill.

When we encash a bill before it's maturity, it's generally discounted with bank, bank charges some discounting charges and thus the process is known as discounting of bill.

When drawer want their money and drawee is not in the position to pay his money, then he wants some time to pay his money and so he requests to make a new bill to drawer.

A bill of exchange is a document used in transactions that orders the payer to pay a certain amount of money to the payee. It is a guarantee of payment on demand or on a specified date, and it cannot be refused or cancelled, like a check.