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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Bills of exchange
Sir what is the difference between advances against collections and discounting bills of exchange?
The end result is the same, but depending on the nature of the agreement there can be problems with advances on collections if any of the debts turn out to be irrecoverable.
Oh ok but in bills of exchange the bad debts are usually insured against?
A bill of exchange would be guaranteed by the bank and it would be up to the bank whether or not they insured against it.