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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Definitions:

Glands

Organs in the body that synthesize substances such as hormones or sweat, secreting them for use throughout the body or excreting them for removal.

Allostatic Load

The wear and tear on the body accumulated through chronic stress, significantly impacting physical and mental health.

Physiological Stress

A reaction of the body to a stimulus or environment that disturbs the physical or mental equilibrium, causing strain to the body's systems.

Central Nervous System

A complex system of nerves and cells that control activities within the body, comprising the brain and spinal cord.