Bill of Exchange Test - 10

noting charges is initially paid by the drawer but it is subsequently recovered by the drawer from the drawee. hence, noting charges is an expense for drawee.

bill of exchange has three parties namely the drawer, the drawee, and the payee. hence notary is not the part of the bill of exchange.

a bill of exchange is drawn on drawee, i.e, creditor. hence creditor accepts the bill.

It is a custom to add days of grace. days of grace are 3 extra days added to the period of the bill.

kite bill is also known as accommodation bill. it's is a bill issued for mutual help. 

NOTARY PUBLIC=the notary public is an officer appointed by the central or state government to exercise the power and functions relating to noting and protesting of negotiable instruments for dishonour.

'noting charges paid' is a proof that bill was dishonoured. 

BILL SENT FOR COLLECTION= when a bill is sent to the bank with an instruction that the bill be retained till the date of maturity and realised it on the due date. it is called bill sent for collection.

a promissory note has two parties namely:-

the promisor/maker: the person who makes the promise to pay the amount and avails the credit such person is known as the maker.

the payee: the person to whom payment is to be made and who grants the credit such person is known as the payee.

noting charges is necessary in the case of promissory note. because it serves as a proof, in the case of dishonour of the bill.