CA Foundation · Accounting · Bills of Exchange and Promissory Notes
In a bill of exchange, the person who is directed to pay the amount of the bill and who becomes liable on the instrument only after signing his acceptance is called the:
The drawee is the person directed by the drawer to pay the bill. He becomes liable on the instrument only after signing his acceptance, and from then he is called the acceptor. The drawer orders payment and the payee receives it.
- ADrawer
- BDraweeCorrect
- CPayee
- DEndorsee
Explanation
The drawer is the maker who gives the order to pay. The person ordered to pay is the drawee, and he becomes the acceptor, liable on the bill, only after signing his acceptance. The payee is the person to whom payment is to be made, so that option is wrong.
Did you get it right without looking?
One question tells you little. A timed set on Bills of Exchange and Promissory Notes shows your real accuracy, how long you take and where you lose marks.
More Bills of Exchange and Promissory Notes questions
- A bill of exchange drawn payable 'at sight' or 'on demand', without any stated time, is due for payment:
- Which of the following statements about a bill of exchange is correct?
- Anil Traders holds a bill for ₹80,000 accepted by Bhavesh & Co. The bill is dishonoured on maturity and noting charges of ₹500 are paid by A…
- On the dishonour of a bill by the acceptor, which statement about the drawer's accounting is correct?
- Gupta & Sons sent a bill of ₹60,000 to its bank for collection. The bank collected it on the due date and deducted ₹400 as collection charge…
- Pooja Enterprises discounted a ₹1,20,000 bill of Rathi & Sons with its bank at 12% p.a. for the remaining 2 months to maturity. What amount …