The Statement Concerning Discounting a Bill Receivable That Is Incorrect

question 39

Multiple Choice

The statement concerning discounting a bill receivable that is incorrect is:

• 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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