Question

Kinds of Negotiable Instruments
A bill which is drawn, accepted or endorsed ______ is called an accommodation bill.

• A. With consideration
• B. Without consideration
• C. (A) or (B)
• D. (A) and (B)

Answer 1

Answer: (B)

Without consideration

Accommodation Bills are drawn and accepted with no consideration passed or received. The Bill, which is drawn just to oblige a friend, who is in need of money, of course without any trading activities, with sole intention of raising funds required for ready cash is known as Accommodation Bill.