What are the main advantages of bills of exchange?
The following are the advantages of a bill of exchanges:
It is a legal evidence of debt.
It is a convenient method for the transfer of debt
A creditor can sue on the bill itself
It is a negotiable instrument and can be transferred for settlement of one’s debt without difficulty.
It can be cashed before due date by discounting.
A debtor enjoys the benefit of full period of credit.
It affords an ease means of transmitting money from one place to another.
It is for the aforesaid advantage, a buyer can easily be included to purchase goods and accept bills drawn on him by the seller when he is not prepared to pay cash at the time of purchase.
You may also be interested in other articles from “accounting for bills of exchange page” chapter:
- Definition and Explanation of Bill of Exchange
- Advantages of a Bills of Exchange
- How a Bill of Exchange Functions
- Promissory Note
- Difference between Bill of Exchange and Promissory Note
- Difference Between Bill of Exchange and Cheque/Check
- Recording Transactions of Bill of Exchange
- Drawing, Acceptance, and Payment of Bill of Exchange
- Discounting of Bill of Exchange
- Bills of Exchange for Collection
- Endorsement of a Bill of Exchange
- Dishonour of a Bill of Exchange
- Renewal of a Bill of Exchange
- Retiring of a Bill of Exchange
- Accommodation Bill of Exchange
- Insolvency of the Acceptor in a Bill of Exchange
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