Introduction 🎢
Ever dreamed of sending a kite soaring high into the sky, augmenting the beauty in the world with colors and joy? Well, accountants once shared this dream - just without the joy and abundant colors. Instead, they preferred a little more drama, because in the financial sphere, ‘kite-flying’ turned out to be a mischievous gamble sometimes leading straight to dishonored payments. Strapping in? Let’s take off on this high-flying adventure through outrageous accounting skies!
What is a Kite? 🎈
Meet the kite: not your regular weekend leisure artifact. In accounting, a kite symbolizes something quite different from that cheerful diamond-shaped flyer. Technically described as an accommodation bill, it’s better known in its devil-may-care alter ego as the kite. Now let’s pry open the fascinating box that this kite comes in:
Accommodation Bill ✉️
An accommodation bill is essentially an IOU dressed to the nines. When two parties exchange accommodation bills, they’re essentially promising a payment or offering a guarantee, often with no funds to back up these ‘promises.’ Think of it as the financial world’s equivalent of blood oaths—except there’s no blood, just a significant risk of financial injury.
The Game of Kite-Flying 🪁
Here comes the thrill - kite-flying! No, we’re not talking about assembling and sending that pretty delta-wing craft up in the park. In finance, kite-flying involves issuing an accommodation bill and then visiting the bank to get it discounted. What’s the catch you ask? The small nugget of truth is knowing (and usually praying otherwise) that the poor individual on whom it’s drawn will dishonor it! 🚨
flowchart TD
A[Kite Issuer] -- Bills Exchange --> B[Bank]
B -- Dreams and Approval --> A[Funds]
A -- Prayers --> B
B -- Collections Failed --> A
A -- Dishonored --> B
Why Fly Kites? 🤔
You might question,
