Multiple choice

Which of the following statements is true?

  1. Creditors can draw a bill on debtors

  2. Debtors can draw a bill on creditors

  3. Bank will draw a bill on customer at the time of overdraft

  4. One can draw the bill on another under any circumstances
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Only a creditor can draw a bill of exchange on its debtor. Going by the definition of Bill of Exchange, a person promises to pay money after some specific time and to make the same valid, it must be accepted by the debtor.

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