Difference/Distinction Between Trade Bill And Accomodation Bill

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

 

Trade Bill

Accomodation Bill

Arises from an indebtedness arising from the purchase of goods or taking of a loan

Is drawn and accepted only for providing funds to one of the parties or both the parties of the bill

On discounting a trade bill, full amount is retained by the drawer

Shared in an agreed ratio between the drawer and drawee

Consideration is present in the trade bill

No consideration is present

Acts as evidence of indebtedness

Acts as a source of finance

In order to recover the debts, the drawer can initiate legal action

Legal remedy for the recovery of amount is not available for immediate parties.

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Financial Accounting

 
 

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