Financial Accounting Assignment Help – Parties of bill of exchange

There are three important parties to a bill of exchange Drawer is the maker or first party of the bill of exchange. A seller or creditor who is entitled to receive money or finance from the debtor can draw a bill of exchange upon the buyer or debtor. Financial Accounting Assignment Help could explain that the drawer after writing or making the bill of exchange has to sign it as the maker of the bill of exchange.

Drawee is the party upon whom the bill of exchange is drawn. Drawee is the purchaser or the debtor of the goods or capital upon whom the bill of exchange is drawn. Payee is the person to which the payment is to be made. The drawer of the bill himself will be the payee if the party keeps the bill with him till the date of its payment. Financial accounting assignment help also explain that the payee may change in the following given situations.

In case the drawer has got the bill discounted, the party who has discounted the bill will become the payee. In case the bill is endorsed in favour of a creditor of the drawer, the creditor party will become the payee. Normally, the drawer and the payee party is the same person. Similarly, the drawee and the acceptor is normally the same party. For example, John sold goods worth $.10,000 to Sam and drew a bill of exchange upon him for the same amount payable after three months. Here, first party is the drawer of the bill and other party is the drawee.

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