Errors Bill Exchange Rules Regarding
Presentment of Bills of Exchange for Acceptance
A bill of exchange must be presented for acceptance. However, all bills are not required to be so presented. Only the following bills must be presented for acceptance : (a) Bills Payable after sight or after presentment and (b) Bills in which it is expressly stipulated that they shall be presented for acceptance.
However following bills need not be presented for acceptance : (i) Bills payable on demand, (ii) Bills payable on a fixed day and (iii) Bills payable after a certain number of days after date. Even in Cases where such presentment is not required by law, it is advisable that all bills must be presented for acceptance for safety and security. Drawee accepts the bill by signing his name on the bill. He may write the word ‘accepted’ also but it is not necessary. After acceptance, the drawee is known as acceptor.
Example Bill of Exchange (BBA Bookkeeping Notes)
Essentials of Valid Acceptance (BBA Bookkeeping Notes)
- Acceptance of Bill: Acceptance must be given on the bill itself. The usual way of acceptance is that drawee writes the word ‘accepted’ across the face or on the back of the bill and signs his name underneath.
- Signature: Acceptance must be signed by drawee either personally or through a duly authorized agent.
- Delivery to Holder: After acceptance, the bill must be delivered to the holder.
BBA 1st Semester Bookkeeping Notes
Rules Regarding Presentment for Acceptance
- Time for Presentment : (i) If a bill specifies a particular place for presentment, it must be presented at that place only, (ii) If no place is specified in a bill, it must be presented as a usual place of business of drawee or at his residence.
- Proof for Presentment: If a bill is to be declared dishonored for non-acceptance there must be definite proof of the presentment of the bill for acceptance and drawee’s refusal for the same. Holder of the bill must prove it before Notary Public and the proof must be duly recorded by Notary Public. Presentment through the post office by a registered letter is sufficient proof of the presentment.
- Place for Presentment : (i) If a bill specifies a particular place for presentment, it must be presented at that place only, (ii) If no place is specified in a bill, it must be presented as a usual place of business of drawee or at his residence.
- Presentment by whom (Section 61): A person entitled to demand acceptance, can present the bill for acceptance. How may be the holder of bill or an agent of such holder?
- Time for Deliberation: Sometimes a drawee requires some time for deliberation before accepting the bill. If so, the holder must allow 48 hours to him for deliberation. After 48 hours, he should demand the redeliver of the bill, If drawee still does not return the bill duly accepted, the holder may treat it as dishonored.
BBA 1st Semester Bookkeeping Notes
