This document defines key concepts related to bill discounting. It explains that most business transactions occur on credit rather than cash basis. Bills of exchange and promissory notes are common instruments used for credit transactions. Bill discounting occurs when a holder of a bill receivable needs immediate cash - they sell the bill to a bank before the due date. The bank pays the discounted value after deducting discount calculated as interest on the unexpired period. Key terms discussed include true discount, banker's discount, banker's gain, present worth, face value, discounted value, and date of maturity.