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What is meant by theendorsement of bills?
Before knowing in details about the topic, our endorsement of the bill homework help team considers itnecessaryto find out what doesit mean. It is the phenomenon when any individual transfers the bill to other individual or a third party to compensate his debt; then it is called an endorsement. Thus the authorising names in billsareendorsement of bills.
The bills can be endorsed by drawer with their signature at back side of the bill. The bill also contains name of third person towhom it is being transferred. Thus the act of moving thebill to the third parties after signing it is what called the endorsement ofbill.
Tips to remember:
- Endorser– one who transfersbill to third party.
- Endorsed– third party (to whom it is being transferred).
- No journal entries are done if amount is payable.
- Entries like (mentioned below) are made in journals:
Bills receivable a/c…..XXXX
How endorsement of Bill acts:
- The bill holder endorses the bill to the creditor to clear his liability.
- In this case, the bill becomes payable to third party, thus receive money.
- The transfer of bill from one person to other occurs through simple
- No formalities or prior notice is required to perform this task.
- It is a negotiable instrument.
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