Question

Bill drawn and accepted for genuine trade transaction is called _________.

• A. trade bill
• B. accommodation bill
• C. genuine bill
• D. commercial bill

Answer 1

Answer: (A)

trade bill

Bills of exchange or promissory notes are drawn to finance the actual transactions in goods, i.e., an acceptance is made to settle a trade debt owing to the drawer by the drawee in case of a bill of exchange and the bill is called a trade bill. As it originates from genuine trade transaction it is for value received and is enforceable.