Bills of Exchange

BILLS OF EXCHANGE :-
Bills of exchange is an instrument in writing containing unconditional order signed by the maker directing a person to pay certain amount of money to drawer or the person holding the instrument.

Parties of bills of exchange :-

Drawer:- A person who writes the bills of exchange.
Drawee:- A person to whom bills of exchange is written.
Payee:- The amount of bills of exchange to whom the amount is paid.

Types of bills of exchange :-
It is divided into two parts Bills Receivable & Bills Payable.

Bills Receivable:- It is the document prepared by seller of the good to customers as a proof of purchase of goods signed by both drawer and drawee. It is bills receiveable for Seller. For e.g. if Mr.x purchase goods from Mr.Y then Mr.Y prepare B/R and signed it and send it to Mr.X then he sign it and it means he agreed to it and pay sum of amount after fixed period of time.
Bills Payable:- It is the document prepared by drawer or drawee and signed by both and it is bills payable for buyer.

Format of Bills of Exchange:-