Accounts- 12th std- bills of exchange.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
26 December 2014
what is the nature of "bill for collection a/c"? is it a real a/c?
26 December 2014
A bill of exchange is a writing by a party (maker or drawer) ordering another (payor) to pay a certain amount to a third party (payee).
the drawer writes the bill in the form of draft in the initial stage. The draft becomes the bill of exchange after its acceptance. It can, thus, be said that the bill has come into existence at drawee’s place. (It was a draft, so far before the acceptance). Bill of exchange is a legal document, so entries will be made on its every movement. The Bill will at first go to the drawer for retention. The drawer will receive the bill, so he will debit Bills Receivable account, because B/R Account is real account for which the rule goes “Debit what comes in”. According to modern approach, Bills Receivable account is an asset which is increasing, so it will be debited. The drawer will credit drawee’s account because he is giver (the rule goes credit the giver). According to modern approach, debtors account as an asset will be credited, because it is decreasing. Debtors will decrease, when they accept the bill. (Decrease in the assets are credited).
the drawer writes the bill in the form of draft in the initial stage. The draft becomes the bill of exchange after its acceptance. It can, thus, be said that the bill has come into existence at drawee’s place. (It was a draft, so far before the acceptance). Bill of exchange is a legal document, so entries will be made on its every movement. The Bill will at first go to the drawer for retention. The drawer will receive the bill, so he will debit Bills Receivable account, because B/R Account is real account for which the rule goes “Debit what comes in”. According to modern approach, Bills Receivable account is an asset which is increasing, so it will be debited. The drawer will credit drawee’s account because he is giver (the rule goes credit the giver). According to modern approach, debtors account as an asset will be credited, because it is decreasing. Debtors will decrease, when they accept the bill. (Decrease in the assets are credited).
Message likes :
2 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- Sale of Equity shares for Purchase of Residential Property
- ECO SUPPLY REPORTIONG IN GSTR-1
- TDS PROCEDURE ON SALE OF IMMOVABLE PROPERTY BY NRI
- Payment to foreign customer
- Non issue of e way bill
- Subscription paid to foreign customer
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
