Answers and Solutions

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TRADE BILLS ARE INVOICES RAISED BY ONE TRADER TO ANOTHER TRADER FOR PURCHASE  AND SALE OF GOODS  AND SERVICES.IT IS DONE BETWEEN  BUSINESSMEN AND OTHER BUSINESSMEN.

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Trade Bill is a negotiable instrument, which can be sold/purchased in the market.

Example- Bills Receivable. Suppose we sell goods worth Rs 10 lacs to a party, and they instead of money, give a signed paper confirming that the said amount shall be paid at end of 3 months to the bearer of the Bills Receivable. Now, we can sell this signed bill to Mr X, at Rs 9 lacs and receive the amount right now. 

Question- Why are bills prepared?

Answer- Because debtors can't be sold, but this way, it is possible to do so and get your money on time.

Question- Why will someone buy the bill?

Answer- to earn. The person whol we have sold the bill will receive Rs 10 lacs, but have paid to us only Rs 9 lacs. Difference of Rs 1 lacs shall be his income.

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Trade bills are the types of bills of exchange drawn by a creditor on his debtor for consideration.

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Bill of exchange issued and/or endorsed (accepted) by non-bank entities and which, therefore, can be discounted only at rates higher than the rate for bank bills. Read more: http://www.businessdictionary.com/definition/trade-bill.html

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A time draft or bill of exchange becoming a trade acceptance when signed by an acceptor.

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Bill of exchange issued and/or endorsed (accepted) by non-bank entities and which, therefore, can be discounted only at rates higher than the rate for bank bills

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Definition of trade bill. : a time draft or bill of exchange becoming a trade acceptance when signed by an acceptor.

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Trade Bill is a bill of exchange drawn on and accepted ( trade acceptance) by a trader in payment for goods.

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Bill of exchange issued and/or endorsed (accepted) by non-bank entities and which, therefore, can be discounted only at rates higher than the rate for bank bills.