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Question
Under which heading the item ‘Bills Discounted but not yet matured’ will be shown in the Balance Sheet of a company?
Options
Current Liability
Current Assets
Contingent Liabilities
Unamortized Expenditure
MCQ
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Solution
Contingent Liabilities
Explanation:
Bills discounted but not yet matured represent bills receivable that the company has discounted with the bank, but the payment from the customer is still pending.
If the customer defaults, the company will be liable to the bank hence, it is a possible obligation, not an actual one.
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