Acha, discounting a bill is when you take a bill you're holding to the bank for some early cash, paying a small charge. If it gets dishonoured later, you have to reverse the entry and debit the original drawer's account for the full amount plus any noting charges the bank paid. Honestly, the theory is clear in my textbook, but in my first week at the firm, I saw a small trader's bill get dishonoured, and my senior just sighed and said, "Now write it off and chase him for months, hoi-hoi." The accounting is one thing, but the real lesson is the weary look on an accountant's face when a piece of paper loses its promise.
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