Bill Of Exchange 2012
Bill of Exchange, a transferable order, drawn by a creditor on a debtor, payable on a stated date; an IOU; a form of near-money that is easily changed into cash, at a discount or small reduction off its full value. (In law an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a certain sum in money to or to the order of a specified person or bearer'.) The bill may be 'accepted by the person to whom it is addressed by signing his name across its face; if the acceptor's (or debtor's) name is good enough, the person drawing the bill (the creditor) may be able to exchange the bill for cash.
A first-class bill, which will receive most favourable discount terms (become 'eligible paper') and be readily exchangeable, requires a second signature or acceptance of high standing. Such bills are accepted by banks, others by accepting houses or merchant banks who specialize in this kind of transaction. (They account for about a quarter of all bills outstanding.) Once a bill has been accepted it may be discounted in the London discount market.
A bill may change ownership several times during its currency (usually three to six months) and is thus a convenient financial instrument, but commercial bills accepted by London banks are not usually discounted before maturity.
Commercial bills of exchange are used mainly as a device for financing goods in transit and transactions that may take some time to complete. Most bills are drawn in connection with overseas trade (mainly in the commodity markets); some relate to trade conducted outside Britain; there is also some financing of internal trade, mainly in trade connected with imports, but also through hire purchase finance companies. During the twentieth century the inland bill of exchange has declined in importance, and most of the short-term business of the discount market is now in Treasury bills.
Bill of Lading, a document in which a shipper acknowledges receipt of a consignment of goods and undertakes to deliver them to the consignee at the port of destination. It is widely used by exporters as evidence of the value of goods in transit, and therefore as security for borrowing until payment for them is received.
Bill of Sale, a document which evidences the sale (or mortgage) of personal 'chattels' but which does not transfer possession from the assignor to the purchaser (or mortgagee). A bill of sale is normally used as security for a loan. If the interest due is not paid, or the loan not repaid, the creditor may at law seize and sell the goods. .
More Degree In Economics - Degrees In Economics
- Bimetallism System
- Building Lease See
- Ccea, Council For The Curriculum, Examinations And Assessment