accountingexplanation.com

Home page                    Download material                     Accounting topics                     Accounting dictionary                     Financial calculators

Home Accounting for Bills of Exchange Types and Classification of Bill of Exchange
 
 

Types and Classification of Bill of Exchange:

Types of Bill of Exchange on the Basis of Period:

On the basis of period bills are of two types:

  1. Demand bills

  2. Term bills

Demand Bills of Exchange:

There is no fixed date for the payment of such bill. They become payable at ay time, when they are presented before payee by the holder.

Tem Bills of Exchange:

These bills are payable after specified period of time. The period after which these bill become due for payment is called tenor.

Types of Bill of Exchange on the Basis of Object:

On the basis of purpose of writing the bills, the bills can be classified as:

  1. Trade Bills

  2. Accommodation Bills

Trade Bills:

These bills are drawn and accepted against the sale and purchase of goods on credit. These are drawn by the seller (creditor) and accepted by the buyer (debtor).

Accommodation Bills:

Such bills do not involve any sale and purchase of goods, rather they are drawn without any consideration. The purpose of such bills is to help one party or both the parties financially.

Classification of Bills of Exchange:

The bills can be classified into two classes given as under:

Inland Bill:

These bills are drawn in a country upon person living in the same country or made payable in the same country. Both drawer and the drawee reside in the same country.

Foreign Bills:

These bills are drawn in one country and accepted and payable in another country, e.g. a bill drawn in England and accepted and payable in India.

New Page 2

Sharing:

Dear visitor! do you like this article? Use the following buttons to share this page with your friends:

 

More study material from this topic:

Definition and explanation of bill of exchange
Types and classification of bill of exchange
Accounting treatment of bill of exchange
Discounting of a bill of exchange
Endorsement of bill of exchange
Bill of exchange sent to bank for collection
Dishonor of bill of exchange
Renewal of bill of exchange
Insolvency of one party
Retiring a bill of exchange under rebate
Accommodation bills of exchange
Bills receivable and bills payable books
Promissory note
Questions and answers

 

 
 

           Like this site? Share it with your friends


 
 

Financial Accounting Topics


  Introduction to Accounting
 ----------------------------------------------------------------------------
  Transactions and Accounting Equation
----------------------------------------------------------------------------
  Analysis of Business Transactions
----------------------------------------------------------------------------
  Journal, Ledger and Trial Balance
----------------------------------------------------------------------------
  Accounting for Bills of Exchange
----------------------------------------------------------------------------
  Special Journals
----------------------------------------------------------------------------
  Cash Book
----------------------------------------------------------------------------
Bank Reconciliation Statement
----------------------------------------------------------------------------
  Final Accounts
----------------------------------------------------------------------------
  Work Sheet
----------------------------------------------------------------------------
  Capital and Revenue Items
----------------------------------------------------------------------------
  Valuation of Inventories
----------------------------------------------------------------------------
  Accounts of Non-profit Making Organizations
----------------------------------------------------------------------------
  Statement of Cash Flows
----------------------------------------------------------------------------
  Accounting Ratios Analysis
----------------------------------------------------------------------------
  Depreciation, Provisions and Reserves
----------------------------------------------------------------------------
  Accounting Dictionary
----------------------------------------------------------------------------
  Financial Calculators
 
 
 
Managerial Accounting Topics

  Financial Statements
----------------------------------------------------------------------------
  Cost Volume Profit Relationship
----------------------------------------------------------------------------
  Variable Costing System
----------------------------------------------------------------------------
  Materials and Inventory Cost Control
----------------------------------------------------------------------------
  Activity Based Costing System
----------------------------------------------------------------------------
  Standard Costing and Variance Analysis
----------------------------------------------------------------------------
  Balanced Scorecard
----------------------------------------------------------------------------
  Capital Investment Analysis/Capital Budgeting
 
 

ADVERTISEMENT

 

Home                         Download material                         Contact us                         Privacy policy                         Link to us                         Advertise

Copyright 2011