Question

The process of paying the amount of the bills before the due date is termed as

• A. Retiring the bills
• B. Accepting the bills
• C. Endorsing the bills
• D. discounting the bills,

Answer 1

Answer:

A. Retiring the bills

Retiring a bill means paying the amount of a bill of exchange before or on its due date. It is the settlement of a bill either by the drawee paying the bill (if it’s a bill payable) or by drawing cash to pay it. Bills can be retired before due date (early payment) or on the due date. When a bill is retired before the due date, sometimes discount or interest may be involved depending on agreement. Retiring the bill removes the liability from the books of the person who has to pay it. “Retiring a bill = making it disappear from your liabilities by paying it.”