Question

Write a short note on:

Discounting of a bill

Answer 1

Discounting of a bill:

1. 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.
2. This process is referred to as the discounting of bills.
3. 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.