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CBSE Class 11-commerce Answered

Explain the following terms: Discounting of a bill Endorsement of a bill Retirement of a bill
Asked by Topperlearning User | 11 Aug, 2016, 10:10: AM
answered-by-expert Expert Answer

  1. Discounting of a bill: Amount received from the bank on presenting the bill by the holder of the bill is known as discounting of a bill. The bank makes the payment of the bill after deducting certain charges. This is done by the holder of the bill if he/she needs funds immediately. The bank, later on, receives the amount from the drawee of the bill on the date of maturity of the bill.
  2. Endorsement of a bill: When an instrument (i.e. Bill of exchange/Promissory note) is transferred to another person, it is known as endorsement of a bill. Here, the person receiving the instrument becomes authorised to receive the payment.

  3. Retirement of a bill: When the payment of a bill is done before the due date of the bill by the drawee, it is known as retirement of a bill. For an early payment of the bill, the holder of the bill allows a certain rebate calculated at a certain percent from the date of retirement to the date of maturity of the bill.

Answered by | 11 Aug, 2016, 12:10: PM
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