bills receivable

1245 views 5 replies

Somesh Agrawal

6 Points Joined March 2019

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

Replies (5)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

it's a personal account as it's related to amount to be received from debtors who is a natural person

kajol

Executive

201 Points Joined February 2019

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