In what respects does a promissory note differ from a bill of exchange?
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Asked in Relationships, The Difference Between
Difference between bill of exchange and promissory note?
What is the difference between Cheque Promissory note and Bill of exchange?
The following are the main differences between a Bill of Exchange and a Promissory Note: A Bill of Exchange is an unconditional order to pay money, whereas a promissory note is an unconditional undertaking or promise to pay money to a certain person. In a Bill of Exchange, there are three parties, viz., the drawer, the drawee and the payee. In a Promissory Note, there are only two parties, viz., the Maker and the Payee. In case of usance (Time) bill, acceptance of the bill is necessary, whereas in a promissory note no such acceptance is required. While foreign bill of exchange is drawn in sets of three, foreign promissory note requires no such sets. In case a foreign bill of exchange is is dishonoured, protesting is compulsory. But when a foreign promissory note is dishonoured, no protesting is required. In case a bill of exchange is dishonoured, a notice of dishonour is required to be given by the holder to the maker of the bill (= drawer). However, in case a promissory note is dishonoured, no notice of dishonour is required to be given by the holder of the maker of the promissory instrument. The liability of the drawer (= maker) of a bill of exchange is secondary, whereas, the liability of the maker of a promissory note is primary. A bill of exchange is drawn for financing trade, whereas, the liability of the maker of is a promissory note is primary. When a bill of exchange is made payable to the bearer, it is not considered as illegal. But a Promissory Note, which does not contain the payee's name, but states that it is payable to bearer, it becomes illegal. In a bill of exchange, the drawee can put conditions subject he will accept the bill. but in a promissory note a maker cannot put any conditions on it. M.J. SUBRAMANYAM, BANGALORE
What is a bill of exchange used for?
Asked in Credit Reports, Banking, Small Business Loans
International bill of exchange?
International Bills of exchange or IBOE (promissory note or certificate of deposit) are similar to checks and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements. The difference between a promissory note and a bill of exchange is that this product is transferable and can bind one party to pay a third party that was not involved in its creation. If these bills are issued by a bank, they can be referred to as bank drafts. If they are issued by individuals, they can be referred to as trade drafts. The only difference between a promissory note and a bill of exchange is that the maker of a note pays the payee personally, rather than ordering a third party to do so. When a bank is the maker promising to repay money it has received plus interest, the promissory note is called a certificate of deposit (CD). mtnbgAThotmailDOTcom
Asked in Business and Industry
Important documents used in BUsiness transactions?
Difference between cheque and bills of exchange and a promisory note?
A bill of exchange is a written order that is issued by either a business or an individual to repay a sum of money without interest. A promissory note is a promise made between payer and borrower with interest accrued. A check is similar to a bill of exchange except the borrower is a bank instead of an individual.
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Which cheque works just like a currency note?
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Asked in The Difference Between
What is the difference between negotiable instrument and cash?
Cash is, well, cash: banknotes and/or specie that are, in themselves, recognized as valid legal tender. A "negotiable instrument" is a document promising payment in cash either at a specified time or upon demand. The one most familiar to most people would be a check, though a promissory note and a bill of exchange are also negotiable instruments (a check is a particular form of a bill of exchange).
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Asked in Accounts Payable, Financial Statements
What is account payable?
Accounts payable is a liability account that is increased by a credit and decreased by a debit. When you purchase something on credit, you are increasing your liabilities with accounts payable to reflect the future obligation of an outflow of resources from the entity. Accounts payable can have subsidiary ledgers to keep track of specific accounts payable. When a business except a bill of exchange it is called a bill payable and when a business promise in writing to pay specific amount in a specific date it is called a promissory note and including bills payable and promissory note that is known as Accounts Payable.
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Asked in Mortgages, Banking
Difference between a check and a bill of exchange?
The following are the main differences between a cheque and a bill of excyange. A cheque is always drawn on a banker, whereas a bill of exchange can be drawn on any person including a banker. A cheque is always payable on demand, whereas a bill of exchange is either payable on demand or after a fixed period. Payment of a cheque can be countermanded, whereas the payment of a bill of exchange cannot be counter mended. A cheque can be made payable to a bearer, but a bill of exchange can be made payable only to order. A cheque is a means of payment. But a bill of exchange is usually used for financing a trade. In a cheque, the drawer of the cheque is primarily responsible, but in a bill of exchange, the drawee or acceptor is primarily responsible for payment. When a cheque is dishonoured, noting and protesting is not necessary/required. But when a bill of exchange is dishonoured, noting and protesting is necessary. When a cheque is dishonoured, the holder of the cheque need not give notice of dishonour to the drawer to make him liable on the cheque. But on the other hand, when a bill of exchange is dishonoured, notice of dishonour is to be given to all parties, including the drawer to make them liable on the instrument. A cheque can be crossed, but a bill of exchange needs no crossing. M. J. SUBRAMANYAM, BANGALORE