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Question
A bill drawn and accepted for providing funds to a friend in need is known as __________.
A bill drawn and accepted for providing funds to a friend in need is known as __________.
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Solution
The correct option is B Accommodation Bill
A bill of exchange endorsed by a third party acting as guarantor and without any compensation is called an accommodation bill. Where a bill is drawn and accepted for providing funds to a friend, such bill is drawn without any consideration to provide funds to the needy and hence, will be termed as accommodation bill.
A bill of exchange endorsed by a third party acting as guarantor and without any compensation is called an accommodation bill. Where a bill is drawn and accepted for providing funds to a friend, such bill is drawn without any consideration to provide funds to the needy and hence, will be termed as accommodation bill.
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