what is bills of discount
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Step-by-step explanation:
Bill discounting is an arrangement whereby the seller recovers an amount of sales bill from the financial intermediaries before it is due. Such intermediaries charge a fee for the service. ... The process of bill discounting is simple and logical. The seller sells the goods on credit and raises invoice on the buyer.
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An accepted draft or bill of exchange sold for early payment to a banker or credits institution at less then face value after the bank deduct fees and applicable interest charge. The bank on credit institutions then collect full value on the draft or bill of exchange when payments comes dues.
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