bills receivable account is which type of account plz explain in detail
it represents whom
also give golden rules of accounting of these 2 entries
BR A/C DR
TO DEBTORS A/C
CASH A/C DR
TO BR A/C
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bills receivable
Replies (5)
it's a personal account as it's related to amount to be received from debtors who is a natural person
Bills Receivable is as assets and Bills Payable is the Liabilities.
It is used as security where both the parties (Seller & buyer) don't know each other, also discountable from the bank if drawer/seller ready to pay some amount of interest to the bank, also transferable to the creditor.
3 golden rules for BR A/C DR TO DEBTORS A/C
• debit the receiver , credit the giver
• debit what comes in , credit what goes out
• debit all the expenses and losses , credit all the incomes and gains
Question analysis
3 accounts affected
bank A/c - personal A/c , where bank is giver its credited as per rules
ashok a/c - personal a/c , hes the receiver of cash therefore hes debited as per rules
discount received - nominal account - its a income therefore its credited
the entries passes by you are correct.
and it's a personal account cause bills receivable represents our debtors .
comment if I am correct?
and it's a personal account cause bills receivable represents our debtors .
comment if I am correct?
@ priya kashyap you are right but I want to know something else
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