Get 3 Yrs of CCI Pro Membership at Greater Value. Subscribe Now!

Bills receivable renewed

1866 views

Save Share

Join Us Follow Us Add as Source

mounica

student

69 Points Posted on 02 May 2014

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

Posted on 04 May 2014

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.