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Question
Give word / term or phrase for the following statement.
Encashment of the bill before due date.
One Word/Term Answer
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Solution
Discounting
Explanation: When the holder of a bill needs money before the maturity date, he may present the bill to a bank and get immediate payment on the security of a bill. The bank deducts a certain amount from the face value of the bill and pays the balance. This process is known as discounting.
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