Home/ Questions/Q 3666
Next
Answered
Jemshah
  • 0
Enlightened
Asked: 2023-01-20T14:06:00+00:00 In:

Outline six differences between a cheque and a bill of exchange. (12 marks)November 2022

  • 0

Outline six differences between a cheque and a bill of exchange. (12 marks)November 2022

You must login to add an answer.

Need An Account,

1 Answer

  1. Best Answer
    Enlightened
    1. Issuer: A cheque is issued by an individual or organization that has an account with a bank, whereas a bill of exchange is issued by a seller (drawer) of goods or services to a buyer (drawee).
    2. Purpose: A cheque is primarily used to make payments for goods and services, whereas a bill of exchange is used as a means of credit and is often used in trade transactions.
    3. Signatories: A cheque is signed by the account holder, whereas a bill of exchange requires the signature of both the drawer and the drawee.
    4. Negotiability: A cheque is a negotiable instrument, which means that it can be transferred to a third party and is payable to the bearer. A bill of exchange is an order instrument, it is not negotiable, it is payable to the order of a specific person.
    5. Time of payment: A cheque is payable on demand, whereas a bill of exchange has a specific maturity date, after which it is payable.
    6. Acceptance: A cheque does not require acceptance, whereas a bill of exchange requires acceptance by the drawee.
    7. Endorsement: A cheque requires endorsement by the person to whom it is payable, whereas a bill of exchange does not require endorsement.
    8. Discharge: A cheque is discharged when it is paid or when it is dishonored, whereas a bill of exchange is discharged when it is accepted, paid or when it is dishonored.
    9. Liability: In case of dishonor of a cheque, the drawer is liable, whereas in case of dishonor of a bill of exchange, the drawer and the drawee are jointly and severally liable.
    10. Legal framework: Cheques are governed by the laws of negotiable instruments and the laws of banking, whereas bills of exchange are governed by the laws of contracts
    • 0