Business, Legal & Accounting Glossary
n. a writing by a party (maker or drawer) ordering another (payor) to pay a certain amount to a third party (payee). It is the same as a draft. A bill of exchange drawn on a bank account is a “check.
A bill of exchange is a document acknowledging an amount of money owed in consideration for goods received. It is a kind of a written financial document that states the company or the individuals mentioned in the document to pay a certain amount on a particular date. It contains the debtor’s authorized signature. This makes it authentic and legal. The parties that sign the bill of exchange have to go by its norms.
A bill of exchange comes in various forms. A bank check is a sort of bill of exchange and so is a bank draft. In some countries, businesses or transactions are usually carried out by a bill of exchange.
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This glossary post was last updated: 26th April, 2020 | 5 Views.