Question
What is meant by 'Retiring a bill under rebate'?

Answer

Retiring a Bill under Rebate When the drawee makes the payment of the bill before its due date, it is called retiring the bill. In such a case, the holder of the bill usually allows him discount, technically called “rebate'. Such rebate is calculated at a specified rate per annum for the period the payment is being made too early. The rebate is a gain to the party making the payment and an expense to the party receiving the payment.

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Similar questions

Calculate the due dates of the bills in the following cases:
 
Date of the Bills
Period
I.
1st February, 2017
2 months
II.
31st January, 2017
3 months
III.
30th September, 2017
2 months
IV.
30th September, 2017
3 months
V.
29th December, 2017
2 months
VI.
31st December, 2017
2 months
VII.
15th July, 2017
30 days
VIII.
27th January, 2016
1 month
Distinguish between Capital Expenditure and Revenue Expenditure.
Show the effect of following transaction on the accounting equation:
a.
Manoj started business with
(i) Cash
(ii) Goods
(iii) Building
₹ 2,30,000
₹ 1,00,000
₹ 2,00,000
b.
He purchased goods for cash
₹ 50,000
c.
He sold goods (costing ₹ 20,000)
₹ 35,000
d.
He purchased goods from Rahul
₹ 55,000
e.
He sold goods to Varun (Costing ₹ 52,000)
₹ 60,000
f.
He paid cash to Rahul in full settlement
₹ 53,000
g.
Salary paid by him
₹ 20,000
h.
Received cash from Varun in full settlement
₹ 59,000
i. Rent outstanding ₹ 3,000
j. Prepaid Insurance ₹ 2,000
k. Commission received by him ₹ 13,000
l. Amount withdrawn by him for personal use ₹ 20,000
m. Depreciation charge on building ₹ 10,000
n. Fresh capital invested ₹ 50,000
o. Purchased goods from Rakhi ₹ 10,000
(Ans: Assets = Cash ₹ 2,42,000 + Goods ₹ 1,43,000 + Building ₹ 1,90,000 + Prepaid Insurouce ₹ 2,000 = ₹ 5,77,000; Liabilities = Outstanding Rent ₹ 3,000 + Creditor ₹ 10,000 + Capital ₹ 5,64,000 = ₹ 5,77,000)
Journalise the following transactions:
2017
 
Jan. 1
Paid into bank for opening a Current Account
10,000
Jan. 3
Goods sold for ₹ 50,000 and the amount was deposited into the bank
 
Jan. 7
Amount withdrawn from bank
20,000
Jan. 10
Goods sold for Cash
15,000
Jan. 12
Amount deposited into bank
12,000
Jan. 14
Goods purchased and payment made by cheque.
25,000
Give one distinction between books of original entry and ledger. Ledger.
Open a 'T' shape Cash Account with the following transactions:
S.No
 
i
Mohan started business with cash
40,000
ii
Purchased Goods
20,000
iii
Sold Goods
24,000
iv
Paid Rent
400
v
Paid salaries
600
vi
Drew for personal use
1,000
What is a Capital Reserve? How is it different from a Revenue Reserve?
OR
Distinguish between 'Revenue Reserve' and a ‘Capital Reserve' on the basis of:
  1. Source of creation.
  2. Purpose.
  3. Usage.
What do you mean by posting?
Why should a business follow the consistency principle?
Explain the double entry mechanism with an illustrative example.