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Bills of Exchange — Book Keeping & Accountancy STD 12 Commerce / Arts — Question

Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsBook Keeping & AccountancyBills of Exchange2 Marks
Question
Discounting is a device to convert the bill into its present value.
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Answer

This statement is True.
When the drawer or holder of the bill approaches the bank to discount the bill, the bank pays the bill amount after deducting a certain amount (which is known as discounting charges). It means conversion of the bill into its present value in cash. So, we can say that discounting is a device to convert the bill into its present value.

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