If the bill is encashed from the bank before the date of maturity it is termed as

Holding till Maturity

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Endorsing the Bill

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Discounting the Bill

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Solution

The correct option is C
Discounting the Bill

If the bill is encashed from the bank before the date of maturity it is termed as Bill Discounting

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Encashing the bill before the date of its maturity is called :

Q. Encashing the bill before the date of its maturity is called as .

Vimal purchased goods Rs 25,000 from Kamal on Jan 15, 2016 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of the maturity the bill was duly presented for payment. Vimal dishonoured the bill. record the necessary journal entries in the books of Kamal and Vimal when.

• The bill was retained by Kamal till the date of its maturity.

• The bill was immediately discounted by Kamal with his bank @ 6% p.a.

• The bill was endorsed by Kamal in favour of his creditor Sharad.

• Five days before its maturity the bill was sent by Kamal to his bank for collection.

Q. When a bill is sent to the bank and instructed that the bill be retained till the date of maturity and realise it, it is said that the bill is .

Narayanan purchased goods for Rs 25,000 from Ravinderan on Feb. 01, 2016. Ravinderan drew upon Narayanan a bill of exchange for the same amount payable after 30 days. On the due date Narayanan dishonoured his acceptance. Pass the necessary journal entries in the books of Ravinderan and Narayanan in following cases:

· When the bill was retained by Ravinderan with him till the date of its maturity.

· When the bill was discounted by Ravinderan immediately with his bank @ 6% p.a.

· When the bill was endorsed to his creditor Ganeshan.

· When the bill was sent by Ravinderan to his bank for collection a few days before it maturity.

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If the bill is encashed from the bank before the date of maturity it is termed as

The correct option is C Discounting the Bill If the bill is encashed from the bank before the date of maturity it is termed as Bill Discounting

The correct option is C
Discounting the Bill

If the bill is encashed from the bank before the date of maturity it is termed as Bill Discounting