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An unconditional order issued by a person or business which directs the recipient to pay a fixed sum of money to a third party at a future date. The future date may be either fixed or negotiable. A bill of exchange must be in writing and signed and dated. also called draft.

(a) When a bill of exchange is drawn and accepted.

Bill receivable account [Dr]

     To Acceptor's personal account [Cr.]

(b) On the due date the acceptance will be presented to the acceptor for payment.

If the payment is received directly:

Cash account [Dr.]

     To Bills receivable account [Cr.]

(a) When the bill is accepted by the drawee.

Personal account of the drawer [Dr.]

     To Bills payable account          [Cr.]

(b) When the bill is met on maturity.

Bills payable account [Dr.]

     To Cash account         [Cr.]