GENERAL KNOWLEDGE

Detailed explanation-1: -A bill of exchange is a negotiable instrument under the Negotiable Instrument Act, 1881. It is an instrument in writing. It contains an unconditional order requiring a certain person to pay a certain sum of money on a stipulated date. There are three parties i.e. Drawer, Drawee, and Payee.

Detailed explanation-2: -Bill of exchange is an order to pay, and not a promise to pay. Therefore, bill of exchange is not regarded as a loan.

Detailed explanation-3: -A Bill of Exchange is an important document in export process that contains reference details of an export shipment like amount of invoice from the buyer, time of payment, bank details, etc. It is used in international shipping as a negotiable instrument.

Detailed explanation-4: -Ans: Loans and advances undertaken are recorded on the liabilities side of an organisation’s balance sheet as it must repay the amount. It can further be recorded under long-term or short-term, based on the nature of the loan or advance taken.