What is the difference between trade bill and accommodation bill
Dear Student,
Trade Bills are the bills drawn on actual transactions of sale & purchase of goods whereas Accommodation Bills are the bills drawn to use it as a source of finance and there is no consideration for which bill is drawn & accepted .
Trade Bills may be honoured on maturity or the drawer may get it discounted from the bank whereas Accommodation Bills are directly discounted from Bank.
Under Trade Bills Drawer is the creditor & drawee is debtor whereas Under Accomodation Bill drawer is the guarantor.
Regards,
Trade Bills are the bills drawn on actual transactions of sale & purchase of goods whereas Accommodation Bills are the bills drawn to use it as a source of finance and there is no consideration for which bill is drawn & accepted .
Trade Bills may be honoured on maturity or the drawer may get it discounted from the bank whereas Accommodation Bills are directly discounted from Bank.
Under Trade Bills Drawer is the creditor & drawee is debtor whereas Under Accomodation Bill drawer is the guarantor.
Regards,