Question

Bill of exchange
X draws a bill on Y. X endorsed the bill to Z. The payee of the bill will be ________.

• A. X
• B. Y
• C. Z
• D. None of the above

Answer 1

The correct option is C Z

There are up to three parties involved in a bill of exchange transaction. The drawee is the party that pays the sum specified by the bill of exchange. The payee is the one who receives that sum. 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. Here, X is the drawer or maker of the bill, Y is the drawee and Z is the payee of the instrument.