Types of Bill of Exchange on the
Basis of Period:
On the
basis of period bills are of two types:
-
Demand bills
-
Term
bills
Demand Bills of Exchange:
There is
no fixed date for the payment of such bill. They become
payable at ay time, when they are presented before payee
by the holder.
Tem Bills of Exchange:
These
bills are payable after specified period of time. The
period after which these bill become due for payment is
called tenor.
Types of Bill of Exchange on the Basis
of Object:
On the
basis of purpose of writing the bills, the bills can be
classified as:
-
Trade
Bills
-
Accommodation Bills
Trade Bills:
These bills
are drawn and accepted against the sale and purchase of
goods on credit. These are drawn by the seller (creditor)
and accepted by the buyer (debtor).
Accommodation Bills:
Such bills do
not involve any sale and purchase of goods, rather they are
drawn without any consideration. The purpose of such bills
is to help one party or both the parties financially.
Classification of Bills of Exchange:
The bills can
be classified into two classes given as under:
Inland Bill:
These bills
are drawn in a country upon person living in the same
country or made payable in the same country. Both drawer and
the drawee reside in the same country.
Foreign Bills:
These bills
are drawn in one country and accepted and payable in another
country, e.g. a bill drawn in England and accepted and
payable in India. |
