Rebate on bills discounted is _______ from interest and discount in the P/L Account .

added

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deducted

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not deducted

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none of the above

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Solution

The correct option is B deducted
Rebate on bills discounted is also known as discount received in advance i.e. discount received but not earned.
In such a situation, the rebate on bills discounts will be deducted from interest and discount in profit & loss account and shown as liability in the balance sheet.

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Similar questions

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Q. The true discount on a bill is

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and banker's discount is

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. If the bill is due

10

months hence, find the rate of interest.

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