Question

Which of the following statements about bank accepted bills is false?

Select one:

a. The acceptor takes on the primary liability for repayment of the face value of the bill

b. The party that issues the bill is the drawer

c. When the bill is first issued, the party that receives the loaned funds is the discounter

d. The secondary liability to pay the holder of the bill at maturity is carried by the drawer

Answer 1

Answer :- Option c - When the bill is first issued, the party that receives the loaned funds is the discounter

( Explanation:- The Statement "When the bill is first issued, the party that receives the loaned funds is the discounter" regarding the bank accepted bills is false. While other statements given in options (a), (b), (c) are correct that is,

The facts regarding the bank accepted bills are:-

The party that issues the bill is known as drawer. Additionally, the acceptor takes on the primary liability for repayment of the face value of the bill. If the bill was dishonoured by the acceptor at maturity, the drawer would then be responsible for the compensation, thus drawer has secondary liability after the acceptor.)