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    • Question

      A bank has Bills Discounted worth ₹4,00,000. Unexpired

      discount at year-end is ₹40,000. What is the adjustment in final accounts?
      A Reduce Bills Discounted by ₹40,000 Correct Answer Incorrect Answer
      B Show ₹40,000 as liability Correct Answer Incorrect Answer
      C Deduct from Discount Earned Correct Answer Incorrect Answer
      D Both b & c Correct Answer Incorrect Answer
      E None Correct Answer Incorrect Answer

      Solution

      Unexpired discount = liability, shown under “Other liabilities” and deducted from discount income in P&L.

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