alleryDiscount on a bill is the difference between:
ACost price and selling price
BFace value and cash received
CDrawer fee and bank tax
DTrade discount and rebate
Answer & Solution
Correct answer: B. Face value and cash received
1. Bank pays cash less a discount when a bill is discounted.
2. Discount = Face value − Cash actually received.
3. It represents the interest cost of early funds.
_Source: ICAI BoS Foundation Paper 1, Ch 6 "Bills of Exchange", §4 discounting_
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