Question

Where the drawer and acceptor are both members of the same group, which of the following statements is true: Select one: All the responses in this list are true. Bills discounted with recourse give rise to a contingent liability which should be eliminated. Bills discounted without recourse cease to be intra-group debts and ought not to be eliminated. Bills held to maturity appear in group data as both a receivable and payable and are eliminated just like any other intra-group debt.

Answer 1

Option-bBills discounted with recourse give rise to a contingent liability which should be eliminated--- is not the answer--as it shoud be mentioned in the nOtes to the financial statements.

Option-c--Bills discounted without recourse cease to be intra-group debts and ought not to be eliminated.---they need to be eliminated.

Answer will be ----Bills held to maturity appear in group data as both a receivable and payable and are eliminated just like any other intra-group debt.