bills discounting definition

Bills are classified into four categories as lcbd (Bill Discounting backed with LC CBD (Clean Bill Discounting DBD (Drawee bill discounting) and IBD (Invoice bills discounting).
Where a usance bill is drawn at a fixed period after sight, the bill must be accepted to establish the maturity.The advising or confirming bank will hide the reimbursement instruction from the beneficiary so that his bank must present the documents to the nominated bank for negotiation in amazon coupons free order to obtain payment under the DC terms.The remitting bank may finance a good creditworthy exporter by purchasing or discounting his collection bills under an "Export Line".There is a tough competition in the market to extend such credit and hence there are a plenty of different products to suit the needs of the client.The entry in the journal of bank will be as under: When a bill is discounted at bank: B/R A/C.XXX, drawer A/C.XXX, discount A/C.XXX (Bill discounted this journal entry indicates, increase in assets (B/R) in the bank, increase in a liabilities (the amount transferred.You will then have to repay the advance from the proceeds of the bill.After getting the bill, the bank will pay cash to the drawer equal to the face value less interest or discount at an agreed rate for the number of days it has to run.There are no hassles of sanctions etc.The entry for discounting a bill in drawer's journal shows increase in drawer's bank balance at present value (face value - discount given increase in a loss (discount given) and decrease in an asset (bill receivable).This process is know as discounting of a bill of exchange.When the opening bank is a member of the Bank nominated for payment, acceptance or negotiation.The bank will become opti free printable coupon the holder and the owner of the bill.A A/C.XXX, b/P A/C.XXX (Acceptance given when a bill is discounted at bank: Bank A/C.XXX, discount A/C.XXX, b/R A/C.XXX (Bill discounted at bank).Table of Contents, the terms invoice discounting or bills discounting or purchase of bills are all same.Such intermediaries charge a fee for the service.However, If the importer refuses a bill the Bank has purchased, the Bank must be sure of being able to get a refund.Finance Against Collection, you as an exporter may ask the Bank for finance against a collection bill.When the nominated bank has confirmed the.No bill of exchange / No acceptance.Whats your view on this?Drawer's Journal, drawee's Journal, b/R A/C.XXX, b A/C.XXX (Acceptance received).
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