Question

Give word / term or phrase for each of the following statement.

Encashment of the bill before due date.

Answer 1

Discounting

Explanation: When the holder of a bill needs money before the maturity date, he may present the bill to a bank and get immediate payment on the security of a bill. The bank deducts a certain amount from the face value of the bill and pays the balance. This process is known as discounting.