1.

What do you understand by Bill of Exchange? Differentiate between Cheque and Bill of Exchange and also draft their specimen.

Answer»

Meaning of Bill of Exchange: When goods are sold on a credit basis, the businessman does not get cash immediately, but he gets it after a stipulated time. In the meantime, he is supplied with a written acknowledgement of debt, which is known as Bills of Exchange.

Difference between Bill of Exchange and Cheque:

Bill of ExchangeCheque
1. It may be written on both individual or firm.1. It is written only on any specific bank.
2. It may be for a fixed term or payable at sight.2. It is always payable on demand.
3. Acceptance is a must in case of it.3. Acceptance is not just in case of a cheque.
4. It may be payable both in-country as well as outside the country.4. Cheque is payable only within the country.
5. It cannot be crossed.5. It may be crossed.
6. It is compulsory to stamp it.6. It is not necessary to stamp it.
7. Three days of grace are allowed.7. No day of grace is allowed.
8. Noting is a must in case of dishonour.8. Noting is not just in case of dishonour.


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