FEDERAL UNIVERSITY OF KASHERE, GOMBE STATE.

FACULTY OF MANAGEMENT SCIENCES

ACCOUNTING DEPARTMENT
P.M.B 0182

Course Code: ACC 3214

Course Title: Company Law II

Matric Number: FUKU/HMSS/19/ACC/0183

Names: Onuh Sunday Oche

ASSIGNMENT;
“In a tabular form, write the similarities and differences
between these three negotiable instruments (Promisory
notes, Bill of exchange and Cheque)”

Course Lecturer: DR. UMALE OKOH

Introduction
What Is a Negotiable Instrument?

A negotiable instrument is a signed document that promises a payment to a specified

person or assignee. A transferable, signed document that promises to pay the bearer a sum
of money at a future date or on-demand.

Negotiable instruments are transferable, which allows the recipient to take the funds as cash,
then use them as preferred.

Negotiable instruments are transferable, so the holder can take the funds as cash or
use them for a transaction or other way as they wish. The fund amount listed on the document
includes the specific amount promised, and must be paid in full either on demand or at a
specified time. A negotiable instrument can be transferred from one person to another. Once
the instrument is transferred, the holder gains full legal title to the instrument.

SIMILARITIES BETWEEN CHEQUE, BILL OF EXCHANGE AND

PROMISORY NOTE

S/No Negotiable Instruments Similarities

1. Cheque, Bill of They are Easily transferable
Exchange and Promisory
Note
2. Cheque, Bill of They all are Absolute Title
Exchange and Promisory
Note
3. Cheque, Bill of They are all in written form.
Exchange and Promisory
Note
4. Cheque, Bill of They are all unconditional offer.
Exchange and Promisory
Note
5. Cheque, Bill of They all require a certain time of payment.
Exchange and Promisory
Note
6. Cheque, Bill of The payee must be certain in all three.
Exchange and Promisory
Note
 7. Cheque, Bill of All three must be accompany with signature.
Exchange and Promisory
Note
8. Cheque, Bill of All three have right to sue offending parties
Exchange and Promisory when cases arise.
Note

DIFFERENCES BETWEEN CHEQUE, BILL OF EXCHANGE AND

PROMISORY NOTE

S/No Basic of Cheque Bill of exchange Promisory

Difference Note
1. Nature of A cheque A bill of A promisory
order/undertaking contains an order exchange contain note contains
to pay money. an unconditional an
order to pay unconditional
money. undertaking to
pay money.
2. Number of There are three There are three There are only
parties parties in a parties in bill of two parties in
cheque (drawer, exchange the promisory
drawee and (drawer, drawee note (the
payee). and payee). maker and the
payee).
3. Identity of the The drawer and In bill of In a promisory
parties the drawee can excahnge, both note, the
be one and same the drawer and maker himself
person. the drawee can cannot be both
be one and same the promisor
person. and the
promisee.
4. Acceptance A cheque must be A time bill must No acceptance
accepted by the be accepted by is necessary in
payee. the drawee. the case of
promisory note
as it is made
by the debtor
himself.
5. Notice of When a cheque is On dishonor of a No notice of
Dishonor dishonored, a bill, notice of dishonor is
notice is given to dishonor must be necessary in
the drawee which given to the the case of
 in turn relates it drawer and other promisory
to the drawer. endorsers. note.
6. Crossing A cheque can be A bill of A promisory
crossed. exchange can not note can not
be crossed. be crossed.
7. Payableness A cheque is Bill of excahnge A promisory
always payable can be payable in note, note on
on demand a later date. the other hand
is payable
either on
demand or
after a
specified
period.
8. Bearer A cheque is A bill of A promisory
payable to order exchange is note can not
or bearer necessarily be made
payable to payable to a
bearer. bearer.
 REFERENCES

McClure, M., Level, A.V., Cranston, C.L., Oehlerts, B. & Culbertson, M. (2014).
Data curation: a study of financial instruments in international practices and needs: Libraries
and the Academy, 14(2), p. 139-164.

McLennan, C.J., Moyle, B.D. & Weiler, B.V. (2013). The role of negotiable
instruments in relation postgraduate research: An analysis of doctoral dissertations completed
between 2000 – 2010. Journal of Applied Economics and Business Research, 3(4), p. 181-
191.