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    Question

    When a bill is discounted with the bank, the party that

    bears the loss if the bill is dishonored at maturity is the:
    A Drawee Correct Answer Incorrect Answer
    B Drawer Correct Answer Incorrect Answer
    C Bank Correct Answer Incorrect Answer
    D Endorsee Correct Answer Incorrect Answer

    Solution

    When a drawer discounts a bill with the bank, they receive immediate payment at a discount. If the bill is dishonored at maturity by the drawee, the drawer (being the endorser to the bank) bears the ultimate loss and is liable to pay the bank.

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