Question

Explain the following concepts​

Answer 1

Answer:

where are your questions dear to explain the concept

Answer 2

Answer:

Discounting of bills refers to the process where the drawer of the bill discounts the bill from the bank in order to convert it into cash at a date prior to the maturity date of the bill against a rate of interest to the bank as a charge. In such a case the bank will become the holder and the owner of the bill.

For example, a drawer has a bill for Rs.50,000. He discounted this bill with his bank three months before its due date at 10% p.a. rate of discount. Discount will be calculated as the follow:

= 50,000 × 10/100 × 3/12

= 1,250

Thus the drawer will receive a cash worth Rs. 48,750 and will bear a loss of Rs.1,250.

Explanation:

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