Question

Assertion (A): The bills issued against credit are called bill receivables.

Reason (R): They are called bill receivables because it is expected that the amount will be received on some future date.

• A. Both A and R are true, and R is the correct explanation of A.
• B. Both A and R are true, but R is not the correct explanation of A.
  
• C. A is true, but R is false.
  
• D. A is false, but R is true.

Answer 1

The correct option is A Both A and R are true, and R is the correct explanation of A.

A bill receivable is a document that a customer formally agrees to pay at some future date (the maturity date). The bill receivable document effectively replaces, for the related amount, the open debt exchanged for the bill. Bill receivables are often remitted for collection and used to secure short-term funding.