Question

Differences between trade bill and accomodation bill

Answer 1

Trade Bill:

1. It is a real bill.

2. Rightly used for financing trade

3. Drawer is a creditor

4. Drawer is a debtor.

5. Valuable consideration is there by backing real transitions

6. Bankers are willing to buy such documents.

7. Documents of title to goods are to the bill.

Accommodation:

1. It is an imaginary bill

2. Misused for raising a loan.

3. Drawer is pretended creditor (Really creditors is the real debtor)

4. Drawer is a pretended debtor.(really a creditor)

5. No value consideration is there because there is no backing of real transaction

6. Bankers are reluctant or unwilling to buy accommodation bills.

7. No documents are attached because of no transitions existed.

hope it clarifies ur doubt dear friend..