Multiple choice

For mutual accommodation, A accepted a bill of 2 months for Rs. 10,000 drawn on him by B. B discounted the bill at 12% p.a. Out of the proceeds, A receives

  1. Rs. 9,800

  2. Rs. 8,100

  3. Rs. 4,900

  4. Rs. 5,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Mutual accommodation means both the persons will receive half the amount, i.e. 10,000. Charges for discounting = 12% per annum We need to find for 2 months, which will come out to be Rs. 200. Rs. 200 will also be divided equally as charges. Therefore, B's receivables will be 5,000 - 100 = 4,900.

AI explanation

Since this is a mutual accommodation arrangement (the bill doesn't represent a genuine trade transaction, only mutual financing help between A and B), the net proceeds from discounting are conventionally shared equally between the two parties rather than kept entirely by one. The discount on Rs. 10,000 for 2 months at 12% p.a. is 10,000 × 12% × 2/12 = Rs. 200, so B receives net proceeds of Rs. 9,800 from the bank, and A's agreed share of those proceeds is half of that, Rs. 4,900.

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