alleryOn discounting a bill with the bank, the journal entry credits:
ABills Payable account
BBills Receivable account
CBank charges paid
DDiscount allowed account
Answer & Solution
Correct answer: B. Bills Receivable account
1. Discounting removes the bill from the holder's asset.
2. Hence Bills Receivable account is credited.
3. Bank Account is debited (with proceeds) and Discount Account is debited (with discount).
_Source: ICAI BoS Foundation Paper 1, Ch 6 "Bills of Exchange", §4 discounting_
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