Bill of Exchange MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on July 22, 2022

Test your learning with this multiple choice question (MCQ) test on the bill of exchange. If you can answer every question correctly, it will be great preparation for your exams, interviews, and professional work.

This quiz consists of 10 MCQs. If you have any problems answering the questions, consider reading our description and analysis of the bill of exchange.

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Frequently Asked Questions

What is a Bill Of Exchange?

A Bill Of Exchange (BOE) is a type of promissory note that serves as a written order from one person (the drawer) to another person (the drawee), instructing the drawee to pay a certain sum of money to a third party (the payee) at some future date. BOEs are often used to finance international trade transactions.

What are the different types of bills of exchange?

A BOE typically contains the following key features: the name and contact information of the drawer and drawee, the amount of money being transferred in U.S. dollars or another currency, the date on which the money is to be transferred, and the name of the payee.

What are the different types of bills of exchange?

What are the different types of bills of exchange?

How do bills of exchange work?

When two parties want to do business with each other but don’t have a direct relationship, they can use a BOE to facilitate the transaction. The drawer creates a BOE, instructions for payment to the payee, and sends it to the drawee. The drawee pays the amount specified in the BOE to the payee.

What are the benefits of using bills of exchange?

The main benefits of using BOEs are: that they provide a way for businesses to finance international trade transactions. In addition, they are generally more secure and less risky than other payment methods, such as cash. Lastly, they are often cheaper to use than other forms of payment.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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