Question

State True or False with reason:-

If a bill is discounted by the holder, no entry is passed in his book when the bill is honoured on the due date.

Options

• True

• False

Answer 1

This statement is True.

On discounting the bill the holder gives the possession of the bill to the bank. On the maturity date, the bank has to present the bill to the drawee to collect the payment. When discounted bill is honoured, the transaction takes place between drawee and bank.