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Question
Write a short note on:
Discounting of a bill
Solution
Discounting of a bill:
- When the holder of a bill is in need of money before the due date of a bill, cash can be received by discounting the bill with the banker.
- This process is referred to as the discounting of bills.
- The banker deducts a small amount of the bill which is called a discount and pays the balance in cash immediately to the holder of the bill.
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RELATED QUESTIONS
Find the odd one:-
A bill of exchange payable after a certain period is known as _________.
A bill whose due date is calculated from the date of acceptance is known a ___________.
When Drawee accepts the bill payable at a particular place only, it is known as _________.
Answer in one sentence.
What are days of grace?
Give Specimen of Bill of Exchange:
- Drawer: Mr. Ram Das, Pune
- Drawee: Mr. Kapil Deo. Mumbai
- Amount: ₹ 1,05,000
- Tenure : 3 Months
- Date of Bill: 3rd March. 2020
- Date of Acceptance: 7th March, 2020
Rajesh sold goods on credit to Sulochana for ₹ 25,000. Rajesh draws a bill for ₹ 25,000 on Sulochana for 3 months. Rajesh discounted the bill with his bank @ 10% p.a. on the same day. On the due date of bill, Sulochana requested Rajesh to accept ₹ 5,000 including ₹ 1,000 for interest and to draw a bill for the balance for 3 months. Rajesh agreed to this proposal. One month before the due date, Sulochana retired the bill for ₹ 20,200.
Pass necessary Journal Entries in the books of Rajesh.
A bill of exchange is a ______.
Write the word/phrase/term which can substitute each of the following statements:
A person in whose favour a bill is endorsed.
The due date of the bill drawn for 2 months on 23rd Nov. 2019 will be ______.
