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Question : Which of the following statement is correct?
Statement 1: Commercial bill used to finance the cash sales.
Statement 2: Commercial bill is a short term instrument generally issued for a period of 90 days.

Option 1: Both are true 

Option 2: Both are false

Option 3: Statement 1 is true and statement 2 is false.

Option 4: Statement 1 is false and statement 2 is true.

 


Team Careers360 5th Jan, 2024
Answer (1)
Team Careers360 19th Jan, 2024

Correct Answer: Statement 1 is false and statement 2 is true.


Solution : Commercial bill is an negotiable instrument which can be easily transferred it is used to finance the credit. The seller draws the bill and the buyer accepts it. The buyer honours the bill on the due date. If the salary needs money be for the due date he can get the bill discounted from the bank. It is a short term instrument general issued for a period of 90 days.

Hence, option D is correct.

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