Dishonoring of Bill of Exchange

When drawee of the bill refuse to make payment of the bill on due date is called dishonoring of bill.

What happens when a bill isn't honored by the acceptor on the day of the month (cash isn't paid to the holder of the bill)? A bill of exchange is said to be dishonored once its acceptor refuses to pay the amount of the bill to the holder of the bill on its maturity. The bill then becomes useless and also the party from whom it's been received liable to susceptible to liable to the number. it's important to understand that, when a bill is dishonored, in whose possession it was? as a result of once a bill is ashamed, all the parties concerned square measure accomplished and books of accounts of all the parties have to be adjusted. for example, A draws a bill of $5,000 on B and B accepts it and returns it to A. A retains the bill in his possession until the due date. On the due date the bill isn't honored by the acceptor. We can see, there square measure 2 parties involved whose books are to be adjusted. If suppose, A has discounted or endorsed the bill, then there are 3 parties involved and books of accounts of all the parties are effected.