{"id":2517,"date":"2023-10-03T08:27:10","date_gmt":"2023-10-03T08:27:10","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=2517"},"modified":"2023-10-03T08:28:29","modified_gmt":"2023-10-03T08:28:29","slug":"week-9-ss1-third-term-commerce-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-9-ss1-third-term-commerce-notes\/","title":{"rendered":"Week 9 – SS1 Third Term Commerce Notes"},"content":{"rendered":"

\u00a0WEEK 9 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Date:\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.
\n<\/strong>TOPIC: NEGOTIABLE INSTRUMENTS
\n<\/strong>CONTENTS
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Bill of exchange
\n\u00a0\u00a0\u00a0\u00a02.\u00a0\u00a0\u00a0\u00a0Dishonoured Bills
\n\u00a0\u00a0\u00a0\u00a03.\u00a0\u00a0\u00a0\u00a0Promissory Notes
\nNEGOTIABLE INSTRUMENTS
\n<\/strong>A negotiable instruments is an instrument whose title (or ownership) on it could be transferred by delivering it to another person with or without endorsement. Examples of negotiable instruments are bills of exchange, cheques, bank drafts, bill of lading, dividend warrants, treasury bills, bank notes and coins promissory notes debentures payable to bearer, bearer bonds, bill of lading etc.
\nBILL OF EXCHANGE
\n<\/strong>A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to who it is addressed to pay on demand, or at a fixed or determinable future time a sum certain in money to, or the order of a specified person or to bearer.
\nIn a simpler language, a bill of exchange refers to a written order issued to a buyer of goods (i.e. the debtor) by the seller of such goods (i.e. the creditor) asking for payment of sum of money at the end of a period of a time, usually three months.<\/p>\n

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\n\t\t\"\"\/<\/p>\n

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\n\u00a0Non-negotiable instruments
\nDock Warrant, share certificate, postal order,
\nMoney order, I.O.U <\/p>\n

\u00a0A debtor who receives a bill of exchange has to write the word “ACCEPTED”, <\/strong>his signature and date across the face of the bill and then return it to the sender (i.e. the drawer of that bill of exchange \u2013 the creditor or seller of the goods concerned).
\nPARTIES TO A BILL OF EXCHANGE
\n<\/strong>i.\u00a0\u00a0\u00a0\u00a0The Drawer \u2013 the creditor or seller of the goods
\nii.\u00a0\u00a0\u00a0\u00a0 The Drawee \u2013 the debtor or buyer of the goods
\niii.\u00a0\u00a0\u00a0\u00a0The Acceptor \u2013 usually the drawee of the bill
\niv.\u00a0\u00a0\u00a0\u00a0The Payee \u2013 the person who receives payment of the amount stated on the bill. He is usually the drawer of the bill or the transferee (or endorse) if the bill is subsequently negotiated (transferred) to another person
\nv.\u00a0\u00a0\u00a0\u00a0The endorser \u2013 this refers to the person who signs his name at the back of the bill before payment is made.
\nWAYS BY WHICH A BILL OF EXCHANGE CAN BE EXCHANGED FOR VALUE
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Keeping it till maturity: NB A bill which has been settled on the due date is called a “matured” bill.
\n2.\u00a0\u00a0\u00a0\u00a0 Negotiating or transferring it to another creditor
\n3.\u00a0\u00a0\u00a0\u00a0Discounting it. The drawer of the bill may sell the bill to his bank earlier than the date specified (i.e. before the bill matures) and obtain cash for it. In this case the bank will pay cash that is less than the face value of the bill to the drawer (or endorsee)
\nTYPES OF BILLS
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Inland Bill: This is used in financing internal or home trade.
\n2.\u00a0\u00a0\u00a0\u00a0Foreign Bill: This is a bill used in financing international trade. It is used as between the importer and exporter.
\nHOW A BILL OF EXCHANGE HELPS TRADE
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Short \u2013 Term Credit: A trader can obtain goods which he may sell at a profit before paying when the bills mature.
\n2.\u00a0\u00a0\u00a0\u00a0A discountable Instrument: The holder can discount it with his bank. This means that the holders capital cannot be locked up in the bill for too long.
\n3.\u00a0\u00a0\u00a0\u00a0A negotiable instrument: The drawer may transfer (i.e. negotiate) it to someone to whom he is indebted
\n4.\u00a0\u00a0\u00a0\u00a0It has a fixed time for payment: The holder is sure of when the bill mature since the time for payment is duly fixed
\n5.\u00a0\u00a0\u00a0\u00a0It offers flexibility in payments and terms of payment.
\nADVANTAGES OF A BILL OF EXCHANGE
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0It is a negotiable instrument
\n2.\u00a0\u00a0\u00a0\u00a0It has a fixed date for payment
\n3.\u00a0\u00a0\u00a0\u00a0It is a credit instrument. i.e. it is a means of short-term credit.
\n4.\u00a0\u00a0\u00a0\u00a0It is a discountable instrument
\n5.\u00a0\u00a0\u00a0\u00a0It provides a written acknowledgement of indebtness.
\n6.\u00a0\u00a0\u00a0\u00a0It is a convenient means of payment.
\nDISHONOURED BILLS
\n<\/strong>To dishonour a bill of exchange means to either
\na.\u00a0\u00a0\u00a0\u00a0Refuse to accept it \u2013 dishonoured by non-acceptance or
\nb.\u00a0\u00a0\u00a0\u00a0Refuse to pay when it falls due \u2013 dishonoured by non-payment.
\nSTEPS TO BE TAKEN BY THE HOLDER OF A BILL WHEN THE BILL
\n<\/strong>IS DISHONOURED
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Noting:<\/strong> This is done by the holder of the bill to obtain formal (or official) proof that a bill has been dishonoured. He takes the bill to a notary public (i.e. a person usually a solicitor) who authenticates the fact that the bill if dishonoured.
\n\u00a0\u00a0\u00a0\u00a0The notary public or his clerk “notes” on the bill of exchange and records it in his register adding his initials (signature), date and noting charges.
\n\u00a0\u00a0\u00a0\u00a0Noting is just a preliminary to the next step \u2013 called a PROTEST.
\n<\/strong>2.\u00a0\u00a0\u00a0\u00a0Protest: <\/strong>The protest is a formal certificate as to the dishonour. It is based upon the noting and specify the person at whose request the bill is protested, place and date of protest the reason for protesting the bill, the demand made and the answer (if any) given, or the fact that the drawee or accepter could not be found. <\/p>\n

\u00a0Difference Between a Bill of Exchange and a Cheque <\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\nPoints<\/strong>\u00a0<\/td>\nBill of Exchange<\/strong>\u00a0<\/td>\nCheque<\/strong>\u00a0<\/td>\n<\/tr>\n
1.\u00a0<\/td>\nDrawer \u00a0<\/td>\nThe Creditor \u00a0<\/td>\nThe Debtor \u00a0<\/td>\n<\/tr>\n
2.\u00a0<\/td>\nDrawee\u00a0<\/td>\nThe buyer of goods \u00a0<\/td>\nThe bank \u00a0<\/td>\n<\/tr>\n
3.\u00a0<\/td>\nPayee\u00a0<\/td>\nThe drawer \u00a0<\/td>\nThe Creditor \u00a0<\/td>\n<\/tr>\n
4.\u00a0<\/td>\nTine of Payment \u00a0<\/td>\nUsually in the Future <\/td>\nPayable on demand \u00a0<\/td>\n<\/tr>\n
5.\u00a0<\/td>\nAcceptance \u00a0<\/td>\nHas to be accepted \u00a0<\/td>\nNot required \u00a0<\/td>\n<\/tr>\n
6.\u00a0<\/td>\nCrossing \u00a0<\/td>\nNo Crossing \u00a0<\/td>\nMay be crossed \u00a0<\/td>\n<\/tr>\n
7.\u00a0<\/td>\nDiscounting \u00a0<\/td>\nCan be discounted \u00a0<\/td>\nCannot be discounted \u00a0<\/td>\n<\/tr>\n
8.\u00a0<\/td>\nNoting and protesting in case of dishonour \u00a0<\/td>\nRequired \u00a0<\/td>\nNot required <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

<\/strong>
\n\u00a0OTHER TERMS CONNECTED TO A BILL OF EXCHANGE
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Days of grace: Bills may be payable on demand or at some future date. In the later case (.i.e. for bills payable at some future date) the bill is payable on the third day after the expiration of the term mentioned on it. These extra three days are called “days of grace”
\n2.\u00a0\u00a0\u00a0\u00a0Retiring a bill: An acceptor may approach the holder of a bill for permission to pay before the due date. A bill taken out of circulation in this way is said to be retired. Usually the hider allows the accepter a “rebate”. Or “discount” for paying before the expiration of the term
\nPROMISSORY NOTES:
\n<\/strong>A promissory note is an unconditional promise in writing made by one person to another, signed by the maker engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.
\nWhereas the person to whom the debt is owed (i.e. the creditor) draws up the bill of exchange, the debtor himself draws up the promissory note. The bill of exchange is an order to the debtor to pay while the promissory note is a promise by the debtor to pay.
\n\"\"\/<\/p>\n

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\n<\/strong>
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\n\u00a0PARTIES TO A PROMISSORY NOTE
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0The maker i.e. the debtor who promises to pay the money.
\n2.\u00a0\u00a0\u00a0\u00a0The payee i.e. the creditor to whom the promise is made.<\/p>\n

\u00a0DIFFERENCE BETWEEN A PROMISSORY NOTE AND A BILL OF EXCHANGE <\/p>\n

\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\nBill of Exchange<\/strong>\u00a0<\/td>\nPromissory Note<\/strong>\u00a0<\/td>\n<\/tr>\n
1.\u00a0<\/td>\nAn order given by one person to another to pay money \u00a0<\/td>\nA promise to pay money \u00a0<\/td>\n<\/tr>\n
2.\u00a0<\/td>\nHas to be accepted by the debtor <\/td>\nAcceptance is not required \u00a0<\/td>\n<\/tr>\n
3.\u00a0<\/td>\nThe drawer is the creditor with secondary liability \u00a0<\/td>\nThe maker is the debtor with primary liability on the note \u00a0<\/td>\n<\/tr>\n
4.\u00a0<\/td>\nIt is negotiable \u00a0<\/td>\nIt is not a good negotiable instrument \u00a0<\/td>\n<\/tr>\n
5.\u00a0<\/td>\nProtest necessary when a bill is unpaid \u00a0<\/td>\nNo protest is required <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

REVIEW QUESTION
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Define a bill of exchange
\n2.\u00a0\u00a0\u00a0\u00a0What is meant by the acceptance of a bill
\n3.\u00a0\u00a0\u00a0\u00a0What is NOTING and PROTESTING as it relates to a bill of exchange.
\nWEEKEND ASSIGNMENT
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Which of the following cheques does not require endorsement (a) Specially crossed cheque (b) Open cheque (c) Bearer cheque (d) Generally crossed cheque.
\n2.\u00a0\u00a0\u00a0\u00a0Which of the following is the most liquid (a) Bill of exchange (b) Promissory note (c) Money order (d) Open cheque
\n3.\u00a0\u00a0\u00a0\u00a0A bill of exchange is made more negotiable it if has been (a) Endorsed (b) Accepted (c) Honoured instantly (d) Given special crossing.
\n4.\u00a0\u00a0\u00a0\u00a0A bill of exchange sold for less than its face value before maturity is said to be (A) Accepted (b) Discounted (c) Dishonoured (d) Protested
\n5.\u00a0\u00a0\u00a0\u00a0A cheque dated 5\/2\/08 but was dishonoured because it was (a) Post dated (b) Ante-dated (c) Stale (d) Order cheque
\nTHEORY
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0State four parties to a bill of exchange.
\n2.\u00a0\u00a0\u00a0\u00a0List any four uses of bill of exchange in foreign trade.
\nREADING ASSIGNMENT
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Essential Commerce for SSS by O.A Longe Page 283 \u2013 287
\n2.\u00a0\u00a0\u00a0\u00a0Comprehensive commerce for SSS by SSS by J. U. Anyaele Page 486 \u2013 493
\n\t\t\t\t<\/strong>GENERAL EVALUATION QUESTIONS
\n<\/strong><\/p>\n

    \n
  1. State eight features of hawking\n<\/li>\n<\/ol>\n
      \n
    1. Explain seven characteristics of a sole proprietor\n<\/li>\n<\/ol>\n
        \n
      1. Outline seven functions of the Central Bank\n<\/li>\n
      2. State six essential features of a bill of exchange\n<\/li>\n
      3. \n
        Give seven reasons why small scale retail businesses may fail\n<\/div>\n

        \u00a0<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        \u00a0WEEK 9 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Date:\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. TOPIC: NEGOTIABLE INSTRUMENTS CONTENTS 1.\u00a0\u00a0\u00a0\u00a0Bill of exchange \u00a0\u00a0\u00a0\u00a02.\u00a0\u00a0\u00a0\u00a0Dishonoured Bills \u00a0\u00a0\u00a0\u00a03.\u00a0\u00a0\u00a0\u00a0Promissory Notes NEGOTIABLE…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,211],"tags":[],"class_list":["post-2517","post","type-post","status-publish","format-standard","hentry","category-posts","category-third-term-ss1-commerce"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=2517"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2517\/revisions"}],"predecessor-version":[{"id":2518,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2517\/revisions\/2518"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=2517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=2517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=2517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}