Rebate on bills discounted is _______ from interest and discount in the P/L Account .addeddeductednot deductednone of the above (2024)

FAQs

What is the rebate on bills discounted as? ›

Rebate on bills discounted is also known as discount received in advance i.e. discount received but not earned. In such a situation, the rebate on bills discounts will be deducted from interest and discount in profit & loss account and shown as liability in the balance sheet.

Discounts involve an immediate reduction in the purchase price, which results in the seller incurring a loss. Rebates, on the other hand, involve a partial refund after the sale, requiring customers to meet specific conditions to receive the rebate. No loss is incurred by the seller. Rebates. Discounts.

Rebate on bills discounted is the interest received in advance and represents unearned discounts for those bills which will mature after the close of the financial year. Rebate on bills discounted for the current year is debited to discount account.

Under this type of lending, Bank takes the bill drawn by borrower on his (borrower's) customer and pay him immediately deducting some amount as discount/commission. The Bank then presents the Bill to the borrower's customer on the due date of the Bill and collects the total amount.

Rebates are collected after payment, while discounts are taken before purchase. Discounts are more likely to be offered by retailers, while rebates are more likely to be offered by manufacturers, such as automakers. Reduced interest rates, by contrast, lower the monthly payments on large purchases such as vehicles.

The prescription drug law requires drug companies to pay a rebate if they raise their prices for certain drugs faster than the rate of inflation. This rebate is paid to Medicare and will be calculated and invoiced by the Centers for Medicare & Medicaid Services (CMS).

If the rebate gets recorded at the point of sale, then that rebate value is recognized as revenue when the product gets sold to your customers. On the other hand, if the rebate is earned at the point of purchase, then it is considered a reduction in the cost of the inventory at the time it is purchased.

A rebate is an amount of money which is paid to you when you have paid more tax, rent, or rates than you needed to. ... a tax rebate. Customers are to benefit from a rebate on their electricity bills. [Also + on]

More Definitions of interest rebate

interest rebate means the 10% cashback earned from the finance charges incurred on the Credit Card outstanding amount of which is not fully paid on or before the payment due date of the Credit Card.

Expert-Verified Answer

Rebate on Bills Discounted is also known as Discount Received in Advance, or, Unexpired Discount or, Discount Received but not earned. In bank balance sheet it shown under the head Other liability and provision.

What is the unearned interest discount? ›

Unearned discount refers to loan interest that has been collected but is not yet recognized as income. Instead, an unearned discount is recorded as a liability that is gradually converted into income as the load matures over time. Unearned discount is more commonly known as unearned interest.

Rebates are a type of sales promotion strategy where a payment is made to the buyer after purchase. Money is returned either as a lump sum or a percentage of the purchase price. From an accounting perspective, rebates are typically treated as a revenue when they are earned, rather than at the time of purchase.

Rebate on bills discounted is also known as discount received in advance i.e. discount received but not earned. In such a situation, the rebate on bills discounts will be deducted from interest and discount in profit & loss account and shown as liability in the balance sheet. Was this answer helpful?

You can approach the bank and collect payment against that invoice much quickly. For making this 'advance payment', the bank will charge some interest from you. So, you will get a discounted amount from the bank. Assuming the discount rate is 5%, the bank will charge you Rs.

Bills discounted dishonored means the bill holder has been discounted from the bank by debiting bank charges in the form of a discount. However, at the time of maturity when the bank demanded money from drawee, drawee had no money and did not pay to the bank. Then it will be called a dishonored bill.

Rebate/Billback means, with respect to any Receivable, any incentives provided to the Obligor thereof related to volume rebates or price incentives, the dollar amount of which is known at the time of invoice of such Receivable. Sample 1Sample 2Sample 3.

This discount is known as a rebate on bills. Thus, we calculate the rebate on bills at a certain rate of interest for the time between the date of payment and the date of maturity. The rebate on bills is an expense of the drawer or the holder of the bill. While it is an income of the drawee or the payer.

A rebate is a partial refund of the cost of an item. It acts as an incentive to help sell the product. If your new cell phone came with a rebate, you'll get a check in the mail for a certain amount of the cost.