What are the different options available to the receiver of a Bill of Exchange?
Answers
Options with the receiver of the bill are to retain the bill till maturity or to get it discounted or to endorse it or to send it for collection to bank.
Answer:
The following different options are available to the receiver of a Bill of Exchange:
(i) Retain the invoice until due.
(ii) Bill discounting at the bank.
(iii) approves the invoice in favor of the creditor and
(iv) sends the invoice to the bank for collection. More information
The required invoice is a promissory note drawn up by the seller to his client/buyer. It serves as proof of debt. When the payee (customer) receives the bill and returns it to the drawer (vendor), it becomes a receipt for the biller because he has the money. On the other hand, it becomes a bill to be paid to the drawer because it is an obligation for him. The drawer can use the invoice as follows:
He can keep the invoice until the due date and collect the money from the recipient.
He may confirm the draft in favor of his creditors.
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