Which Statement Concerning Discounting a Bill Receivable Is Incorrect

question 25

Multiple Choice

Which statement concerning discounting a bill receivable is incorrect?

• A) To be discounted, before it matures, a bill receivable may be sold to a bank in exchange for cash.
• B) In calculating the amount of discount on sale of the bill the discount rate is applied to its maturity value for the period it is held by the discounter.
• C) One of the disadvantages of a bill of exchange is the relative difficulty with which it can be converted into cash.
• D) The maturity value of the bill less the discount deducted by the bank is paid to the endorser of the bill by the bank.

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