Question

Who draws a bill of exchange?

• A. Creditor
• B. Debtor
• C. Drawer
• D. None of these

Hint:

The Drawer initiates the bill, while the Drawee (Debtor) accepts it.

Answer 1

The Correct Option is C

To understand who draws a bill of exchange, it is essential to know the key parties involved in a bill of exchange transaction:

• Drawer: The person who makes or draws the bill. The drawer is typically a creditor who is owed money by the debtor.
• Drawee: The person (or entity) on whom the bill is drawn, often the debtor who owes money to the drawer. Once the drawee accepts the bill, they are referred to as the acceptor.
• Payee: The person who is entitled to receive the amount stated in the bill. In many cases, the payee and the drawer are the same person, especially if the bill is payable to the drawer themselves.

In the context of the question and the options given:

1. Creditor: While a creditor is involved in the bill of exchange, they are referred to as a `drawer` when they draw the bill.
2. Debtor: The debtor is the drawee until the bill is accepted. They do not draw the bill.
3. Drawer: This is the correct option, as the drawer is the one who draws (creates) the bill of exchange.
4. None of these: This is not applicable since the correct answer is the `drawer`.

Hence, the correct answer is the Drawer, who is the individual or entity responsible for drawing the bill of exchange.