Bill of exchange animation example.

Summary

On January 1, 2016, Rao sold goods to Ready for 10,000 rupees, receiving half the payment upfront. The remaining amount was covered by a bill of exchange drawn by Rao, which Ready accepted and returned. On the due date, February 3, 2016, Rao presented the bill and received the final payment. In this transaction, Rao served as the creditor, drawer, and payee, while Ready was the drawee, illustrating a typical bill of exchange process.

Takeaways

• 📅 Date of Transaction: The goods transaction between Reddy and Rao took place on January 1, 2016.
• 💼 Rao's Role: Rao is the seller of goods, the drawer of the bill of exchange, and the payee who receives payment.
• 💡 Immediate Payment: Half of the 10,000 rupees for the goods was paid immediately by Reddy.
• 📝 Bill of Exchange: Rao issued a bill of exchange for the remaining half payment to be paid after 30 days.
• 🗓 Due Date: The bill of exchange had a due date of February 3, 2016.
• 🤝 Acceptance: Reddy accepted the bill of exchange and returned it to Rao, indicating agreement to the terms.
• 🔄 Presentation and Payment: On the due date, Rao presented the bill to Reddy, and Reddy made the payment as per the bill's terms.
• 🔑 Drawer's Responsibility: The drawer (Rao) is responsible for ensuring the payment is made to the payee (Reddy).
• 🏢 Office Setting: The meeting and transaction took place in Rao's office.
• 🔑 Payee's Role: The payee (Reddy) is the person to whom the payment is made, and in this case, he also accepts the bill of exchange.
• 💼 Normalcy of Roles: Typically, the drawer and payee are the same person, but in this scenario, they are different.

Q & A

Who is going to meet Rao in his office?

Reddy is going to meet Rao in his office.

What was the amount of goods sold by Rao to Reddy?

Rao sold goods to Reddy for 10,000 rupees.

When did Rao sell the goods to Reddy?

Rao sold the goods to Reddy on January 1, 2016.

How much of the payment was made immediately by Reddy?

Half of the payment was made immediately by Reddy.

What did Rao do with the remaining half of the payment?

Rao drew a bill of exchange upon Reddy for the remaining half of the payment.

Who accepted the bill of exchange and when?

Reddy accepted the bill of exchange and returned it to Rao on February 3, 2016.

What is the due date for the bill of exchange?

The due date for the bill of exchange is February 3, 2016.

What is the role of Rao in the transaction involving the bill of exchange?

Rao is the creditor, drawer, and payee in the transaction.

What is the role of Reddy in the transaction involving the bill of exchange?

Reddy is the drawee in the transaction.

What is the definition of a drawer in a bill of exchange?

The drawer is the person who makes the bill of exchange and pays the person to whom the payment is to be made.

What is the definition of a payee in a bill of exchange?

The payee is the person to whom the payment is to be made, and in this case, Rao is also the payee.