Question
Explain the difference between Bill of Exchange and Promissory Note.
| Difference | Bill of Exchange | Debtor writes promissory note on creditor. |
| $1.$ Meaning | A bill of exchange is an instrument in writing containing an unconditional order, ****** by the drawer, directing a certain person to pay a certain sum of money only at a specified time to a ******* person or according to *** order or to the holder of the instrument. | The acceptance of a promissory note is not necessary. |
| $2.$ Order or Promise | A bill of exchange ** an unconditional ***** to pay money. | ************** for the payment ** money is ** the drawer of a promissory note. |
| $3.$ Parties | There are three parties in a bill of exchange: 1. Drawer of a bill, 2. Acceptor of a **** 3. Receiver of ***** (Payee) | No days of grace are allowed In case of promissory note. |
| $4.$ Drawer or Writer | Creditor draws *** bill on debtor. | A ********** note is a ********* for the writer of promissory note. |
| $5.$ Acceptance | The acceptance of a bill is necessary. | There *** no accommodation ********** note. |
| $6.$ Responsibility | ************** for the payment of money is of *** acceptor of a bill, | There ** no need of notice for the dishonour of a promissory note. |
| $7.$ Days of grace | Three days of ***** are allowed after the period of the bill ** pay the amount. | Debtor ****** promissory note on creditor. |
| $8.$ Receivable or Liability | A bill is a ‘receivable’ (asset) for the drawer ** a bill. | The acceptance of a ********** note ** not necessary. |
| $9.$Accommodation | There *** be ************* bills. | Responsibility for *** ******* of money is of the drawer of a promissory note. |
| $10.$ Notice | Notice ** to be issued in case of dishonour of the bill. | No days of grace are allowed In case of promissory note. |
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| $( 1)$ Bad debts reserve | $( 2)$ Debenture redemption fund |
| $( 3)$ Depreciation fund | $( 4)$ Workers accident compensation fund |
| $( 5)$ Discount reserve on debtors | $( 6)$ Dividend equilization fund |
| $( 7)$ Capital reserve | $( 8)$ Workers profit sharing fund |
| $( 9)$ General reserve | $( 10)$ Capital redemption reserve. |