Banking · Bank Final Accounts
When a bank prepares its Profit and Loss Account, it often encounters 'Rebate on Bills Discounted'. How is this item specifically treated to ensure the 'Matching Principle' of accounting is followed?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It is added to the Interest/Discount income in Schedule 13 for the current year.
- 2It is treated as an Operating Expense in Schedule 16.
- 3It is deducted from the Interest/Discount income in Schedule 13 and shown as a liability in Schedule 5.✓
- 4It is shown as an asset in Schedule 11 because it represents future income.
Correct answer
It is deducted from the Interest/Discount income in Schedule 13 and shown as a liability in Schedule 5.
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