Advantages of Bills of Exchange


Advantages of Bills of Exchange

Learning Objective:

  1. What are the main advantages of bills of exchange?

The following are the advantages of a bill of exchanges:

  1. It is a legal evidence of debt.

  2. It is a convenient method for the transfer of debt

  3. A creditor can sue on the bill itself

  4. It is a negotiable instrument and can be transferred for settlement of one’s debt without difficulty.

  5. It can be cashed before due date by discounting.

  6. A debtor enjoys the benefit of full period of credit.

  7. It affords an ease means of transmitting money from one place to another.

It is for the aforesaid advantage, a buyer can easily be included to purchase goods and accept bills drawn on him by the seller when he is not prepared to pay cash at the time of purchase.

You may also be interested in other articles from “accounting for bills of exchange page” chapter:

  1. Definition and Explanation of Bill of Exchange
  2. Advantages of a Bills of Exchange
  3. How a Bill of Exchange Functions
  4. Promissory Note
  5. Difference between Bill of Exchange and Promissory Note
  6. Difference Between Bill of Exchange and Cheque/Check
  7. Recording Transactions of Bill of Exchange
  8. Drawing, Acceptance, and Payment of Bill of Exchange
  9. Discounting of Bill of Exchange
  10. Bills of Exchange for Collection
  11. Endorsement of a Bill of Exchange
  12. Dishonour of a Bill of Exchange
  13. Renewal of a Bill of Exchange
  14. Retiring of a Bill of Exchange
  15. Accommodation Bill of Exchange
  16. Insolvency of the Acceptor in a Bill of Exchange

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