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What is Discounting of Bill?

20. What is Discounting of Bill?

1. Interest deducted in the bill
2. The procedure by which the holder of the bill transfers the title of the bill with the assistance of his creditors.
3. The date of drawing plus the terms of the bill.
4. The date of acceptance plus terms of the bill.

Answer: A) Interest deducted in the bill

Explanation:

In case the holder of the bill needs cash, then, at that point, he can go to the bank for encashment of the bill before the due date. The bank will give cash to the holder of the bill in the wake of cutting some revenue. That interest deducted is called a discount on the bill.