Question

What is rebate on bills discount?

Answer 1

The following entry is required to be passed: Interest and Discount A/c Dr. To Rebate on Bills Discounted A/c. ADVERTISEMENTS: In other words, the same is deducted from Interest and Discount Account in Profit and LossAccount and the same will also appear in the Liability side of the Balance Sheet.

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Answer 2

Meaning of Rebate on Bills Discounted:

Rebate on Bills Discounted is also known as Discount Received in Advance, or, Unexpired Discount or, Discount Received but not earned.

Its treatment is same as we do in the case of Interest Received in Advance.


Thus:

(i) If it is given only in the Trial Balance:

— the same will be shown as a liability and will appear in the liability side of the Balance Sheet.

(ii) If it is given in adjustment:

— In that case, the same is deducted from the Income from Interest and Discount in Profit and Loss Account and the same also will appear in the liability side of the Balance Sheet.


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