bill of exchange

bill of exchange

Short-term negotiable financial instrument consisting of a written order addressed by the seller of goods to the buyer requiring the latter to pay a certain sum of money on demand or at a future time. Bills of exchange are often used in international transactions, and the holder of such a bill may redeem it in cash immediately by selling it to a bank at a discount. Bills of exchange used in domestic transactions are sometimes called drafts. See also promissory note.

This entry comes from Encyclopædia Britannica Concise.
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