Difference/Distinction Between Bill Of Exchange And Promissory Note

August 31st, 2008 Comments off
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Append below are the main differences/distinction between:

 

Bill Of Exchange

Promissory Note

There are three parties namely drawer, drawee and payee

There are only two parties viz maker and payee

The drawer and payee may be the same person

Maker cannot be the payee

There is an unconditional order to drawee to pay according to the drawer’s direction

Contains an unconditional promise by the maker to pay to the payee or to his order

Payable after sight must be accepted by the drawee or someone else on his behalf before it can be presented for payment

Presented for payment without any prior acceptance by the maker

The liability of the drawer is secondary and conditional

Liability of a maker of promissory note is primary and absolute.

 

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Financial Accounting

 
 

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