Aiou Solved Assignment 2 Accountancy Code 311 Autumn 2016 explains bill of exchange. Students can find all about this in aiou solved assignment 2 code 311 for the semester autumn 2016. Some students know book keeping as accountancy.
AIOU SOLVED ASSIGNMENT 2 ACCOUNTANCY CODE 311 AUTUMN 2016 BILL OF EXCHANGE
A bill of exchange is a binding agreement by one party to pay a fixed amount of cash to another party as of a predetermined date or on demand. Bills of exchange ore primarily used in international trade…. This party requires the drowee to pay a third party (or the drawer can be paid by the drawee). Payee. The bill of exchange can be classified on the basis of Place, Purpose, Documents, Parties, and; Time.
AIOU CODE 311 SOLVED ASSIGNMENT 2 BOOK KEEPING AUTUMN 2016
Classification of Bills of Exchange
1. On the basis of place, bills con be classified as inland bill and foreign bill. In Inland bill, parties belong to the same country. In foreign bill, parties belong to different countries. Inland bill may be a trade bill or accommodation bill, while foreign bill will be mostly a trade bill.
2. On the basis of purpose, bills can be classified as trade bill or accommodation bill. Trade bill arises out of genuine trade transaction. Accommodation bill or kite bill is meant for raising funds among the parties and it is for the purpose of discounting in the money market.
3. When bills are accompanied by trade documents, they are called documentary bill. When no document is accompanying a bill, it is a clean bill. Documentary bill is again classified as documents against acceptance bill or D/A bill and documents against payment bill or D/P bill. When the exporter sends to the importer a D/A bill, the bill will be accompanied by the following documents:
• Bill of lading,
• Consular invoice,
• Certificate of origin,
• Marine insurance policy or Air insurance policy, and;
AIOU SOLVED ASSIGNMENT 2 CODE 311 AUTUMN 2016