The incorrect statement is The drawer and the payee can never be the same. Important PointsBill of Exchange: A bill of exchange is an agreement between two parties in which one party is bound to pay a certain amount of money to the other party on a specified date or on order. It is a type of Negotiable Instrument which allows the buyer and seller to carry out credit operations. It is an "unconditional order" and has to be signed by both the parties. Drawer: Drawer of a bill is person who actually has sold the goods on credit to the other party. He draws the bill upon the buyer. So, Option 2 is a correct statement. Drawee/ Acceptor: Drawee or Acceptor is the person who has purchased the goods on credit from the seller. He is the person upon whom the bill is drawn, and he accepts the order to make the payment. So, Option 1 is a correct statement. Payee: The payee is the person to who holds the bill at the time of payment and is entitled to receive the payment. So, Option 3 is a correct statement. Payee can be the drawer himself or any third-party also. So, option 4 is an Incorrect Statement. Example: Consider Anil as the drawer of the bill and Mahesh as the drawee. Anil draws a bill upon Mahesh, and it is duly accepted by Mahesh. Anil endorses the bill to one of his creditor, Ritesh. In this case, Ritesh will be entitled to receive the payment upon maturity and will be called as payee.