Question

What are the types of bills of exchange?

Answer 1

Trade bill: Where the bill of trade is drawn and acknowledged to settle an exchange of trade, it is known as a trade bill. This bill of trade is drawn by the dealer of the products and is acknowledged by the purchaser.

Accommodation bill: Where a bill of trade is drawn and acknowledged for shared assistance, it is called an accommodation bill. This bill is for common advantage without a trade exchange. It doesn’t include a deal or acquisition of any services and products. This bill conveys an arrangement between two parties to give monetary help to each other.

Also see:

• MCQs on Bills of Exchange
• Difference Between Bill of Exchange and Promissory Note