Promissory Note

What is a Promissory Note? – Definition A promissory note is an instrument in writing (Not being a banknote or a currency note) containing an unconditional undertaking signed by the maker to pay a certain sum of money only to; or to the order, of a certain person, or to the bear of the instrument”. … Read more

Accommodation Bill

What is Accommodation Bill? – Definition Accommodation bill is That which is drawn and accepted without any consideration. In fact, these bills are drawn for the financial assistance of one or both the parties in bill of exchange. Explanation Bill of exchange comes into existence due to the same trading activities. A creditor draws a … Read more

Insolvency

What is meant by Insolvency? – Definition Insolvency of a person arises when he is unable to pay his debts when they fall due. Thus insolvency means inability of a person to pay his debts when they fall due. Explanation An insolvent person may have some valuable assets. When he is declared as an insolvent … Read more

Renewal of Bill of Exchange

Renewal of Bill of Exchange – Definition Renewal of bill of exchange is an act of cancellation of old bill before its maturity in return of a new bill, including interest, for an extended period. It is done by drawer on request of drawee. Explanation Sometimes drawee may not in position to pay the amount … Read more

Accounting for Bill of Exchange

Accounting for bill of exchange starts when drawer draws a bill and drawee accepts it. Drawee returns the bill to the drawer after accepting. Now drawer is the holder of the bill and he can use this bill in the following different ways. A. By holding the bill till due date B. By discounting the … Read more

Bill of Exchange

What is Bill of Exchange? – Definition A bill of exchange is “An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time, a certain sum in money to … Read more