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Bills receivable renewed

A/c entries 1755 views 2 replies

mounica

student

143 Points Joined November 2013

MY QUERY IS

Self Balancing Ledgers :

if in question Bills Receivable Renewed is given....

whether we have to pass 2 entries --->

1. Debtors A/c Dr

To Bills Receivable

(being cancellation of old B/R on renewal)

2. Bills Receivable A/c Dr

To Debtors

(being B/R renewed)

whether we have to pass only one entry as under

Bills Receivable A/c Dr

To Debtors

(being B/R renewed)

Replies (2)

Guest

If you pass only second entry for new bill. Then B/R balance will become double, since it was having already bill as debit balance that has been cancelled. i.e. suppose bill was for Rs. 100, then there must already be an entry B/R Dr. To Debtors. And if bill is renewed and again you pass this entry then there will be some error, right! That's why first you'll have to cancel the original bill and do new entry of new bill. So, first option is correct.