1. S1: In the computation of net proceeds from discounting of notes, the discount period is determined by counting the number of days/months from the date of the note up to the date of discounting.S2: In the computation of net proceeds from discounting of notes, the interest added to the principal to get the maturity value covers the interest from the date of discounting up to the maturity date.

a. Both statements are correct.

b. Both statements are incorrect

c. Only S2 is correct.

d. Only S1 is correct.

2. S1: In note discounting treated as a secured borrowing, a contingent liability is recognized on the date of discounting.S2: In note discounting treated as a conditional sale, an accounting liability is recorded an amount equal to the face amount of the note receivable discounted.

a. Both statements are correct.

b. Both statements are incorrect

c. Only S1 is correct.

d. Only S2 is correct.