becker cma

Limited Period Offer Avail 20% discount in all subjects CA,CS and CMA,Coupon- OFFER20 Call: 088803-20003

CA Final Online Classes
Prodamy

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

nature of account


vikas ghuwalewala (owner)     27 April 2010

vikas ghuwalewala
owner 
 5 likes  86 points

| My Other Post

what is the nature of bills receivables and bills payable account ??? 

is it personal or real or why???


(Guest)

Both B/R and B/P are personal A/cs… To be more apt, they are Representative Personal A/c

 

Why??

Both these accounts represent Debtors or creditors of a particular entity.

The rule followed to pass entry in such cases is:

Dr. the receiver of the benefit

Cr. The giver of the benefit.

In the above rule I have highlighted the inner meaning of rule. Suppose when B/R is issued, it’s Dr. because that B/R represents Debtor from whom money is receivable... In a way our entity has given those debtors a benefit i.e. credit so as per rule we Dr. B/R a/c( at the time of issue).

 

Similarly B/P which is issued against creditors and it represent the liability towards creditors...  It’s credited because Creditors have given us the benefit i.e. credit. So we Cr. B/P  A/c(at the time of issue)

 

To be more clear and to the point, Both B/R and B/P cannot be Real A/c…    Real a/c applies to assets of an entity.. These B/R and B/P are not assets  because they are not yet acquired as like Plant, building etc. They are yet to be encashed.  Asset means which has been acquired and has some value.

 

Hence, Bills Receivable and Bills Payable are Representative Personal A/cs.

 

Hope you have understood. If not, ask again without hesitation.

7 Like
CMA.Baskar.V

CMA.Baskar.V (Cost Accountant)     27 April 2010

CMA.Baskar.V
Cost Accountant 
 29 likes  395 points

View Profile | My Other Post

good reply by fazid.........

CA Himanshu Bansal

CA Himanshu Bansal (Risk Manager)     27 April 2010

CA Himanshu Bansal
Risk Manager 
 201 likes  2345 points

View Profile | My Other Post
Originally posted by : Faiz Ahmed
Both B/R and B/P are personal A/cs… To be more apt, they are Representative Personal A/c
 
Why??
Both these accounts represent Debtors or creditors of a particular entity.
The rule followed to pass entry in such cases is:
Dr. the receiver of the benefit
Cr. The giver of the benefit.
In the above rule I have highlighted the inner meaning of rule. Suppose when B/R is issued, it’s Dr. because that B/R represents Debtor from whom money is receivable... In a way our entity has given those debtors a benefit i.e. credit so as per rule we Dr. B/R a/c( at the time of issue).
 
Similarly B/P which is issued against creditors and it represent the liability towards creditors...  It’s credited because Creditors have given us the benefit i.e. credit. So we Cr. B/P  A/c(at the time of issue)
 
To be more clear and to the point, Both B/R and B/P cannot be Real A/c…    Real a/c applies to assets of an entity.. These B/R and B/P are not assets  because they are not yet acquired as like Plant, building etc. They are yet to be encashed.  Asset means which has been acquired and has some value.
 
Hence, Bills Receivable and Bills Payable are Representative Personal A/cs.
 
Hope you have understood. If not, ask again without hesitation.

Really good explanation Faiz.. :)

1 Like
Santhosh Poojary

Santhosh Poojary (SIEMPRE AHÍ PARA TI)     28 April 2010

Santhosh Poojary
SIEMPRE AHÍ PARA TI 
 2659 likes  15587 points

View Profile | My Other Post

HaY...Great Explanation by Faiz...keep it up dude..............

vikash rathi

vikash rathi (Chartered Accountant)     28 April 2010

vikash rathi
Chartered Accountant 
 59 likes  787 points

View Profile | My Other Post
Originally posted by : Faiz Ahmed
Both B/R and B/P are personal A/cs… To be more apt, they are Representative Personal A/c

Why??
Both these accounts represent Debtors or creditors of a particular entity.
The rule followed to pass entry in such cases is:
Dr. the receiver of the benefit
Cr. The giver of the benefit.
In the above rule I have highlighted the inner meaning of rule. Suppose when B/R is issued, it’s Dr. because that B/R represents Debtor from whom money is receivable... In a way our entity has given those debtors a benefit i.e. credit so as per rule we Dr. B/R a/c( at the time of issue).

Similarly B/P which is issued against creditors and it represent the liability towards creditors... It’s credited because Creditors have given us the benefit i.e. credit. So we Cr. B/P A/c(at the time of issue)

To be more clear and to the point, Both B/R and B/P cannot be Real A/c… Real a/c applies to assets of an entity.. These B/R and B/P are not assets because they are not yet acquired as like Plant, building etc. They are yet to be encashed. Asset means which has been acquired and has some value.

Hence, Bills Receivable and Bills Payable are Representative Personal A/cs.

Hope you have understood. If not, ask again without hesitation.

agree with it ....really good reply.......
Vikas Gupta

Vikas Gupta (CHARTERED ACCOUNTANT)     28 April 2010

Vikas Gupta
CHARTERED ACCOUNTANT 
 3852 likes  16295 points

View Profile | My Other Post
Originally posted by : SAN...
HaY...Great Explanation by Faiz...keep it up dude..............
sivaram

sivaram (Asst Mgr-Taxation)     28 April 2010

sivaram
Asst Mgr-Taxation 
 515 likes  6918 points

View Profile | My Other Post

 

Originally posted by : Faiz Ahmed
Both B/R and B/P are personal A/cs… To be more apt, they are Representative Personal A/c
 
Why??
Both these accounts represent Debtors or creditors of a particular entity.
The rule followed to pass entry in such cases is:
Dr. the receiver of the benefit
Cr. The giver of the benefit.
In the above rule I have highlighted the inner meaning of rule. Suppose when B/R is issued, it’s Dr. because that B/R represents Debtor from whom money is receivable... In a way our entity has given those debtors a benefit i.e. credit so as per rule we Dr. B/R a/c( at the time of issue).
 
Similarly B/P which is issued against creditors and it represent the liability towards creditors...  It’s credited because Creditors have given us the benefit i.e. credit. So we Cr. B/P  A/c(at the time of issue)
 
To be more clear and to the point, Both B/R and B/P cannot be Real A/c…    Real a/c applies to assets of an entity.. These B/R and B/P are not assets  because they are not yet acquired as like Plant, building etc. They are yet to be encashed.  Asset means which has been acquired and has some value.
 
Hence, Bills Receivable and Bills Payable are Representative Personal A/cs.
 
Hope you have understood. If not, ask again without hesitation.

 beautiful explanation

Renuka

Renuka (CA FINAL)     28 April 2010

Renuka
CA FINAL 
 22 likes  317 points

View Profile | My Other Post

 

Originally posted by : Faiz Ahmed
Both B/R and B/P are personal A/cs… To be more apt, they are Representative Personal A/c
 
Why??
Both these accounts represent Debtors or creditors of a particular entity.
The rule followed to pass entry in such cases is:
Dr. the receiver of the benefit
Cr. The giver of the benefit.
In the above rule I have highlighted the inner meaning of rule. Suppose when B/R is issued, it’s Dr. because that B/R represents Debtor from whom money is receivable... In a way our entity has given those debtors a benefit i.e. credit so as per rule we Dr. B/R a/c( at the time of issue).
 
Similarly B/P which is issued against creditors and it represent the liability towards creditors...  It’s credited because Creditors have given us the benefit i.e. credit. So we Cr. B/P  A/c(at the time of issue)
 
To be more clear and to the point, Both B/R and B/P cannot be Real A/c…    Real a/c applies to assets of an entity.. These B/R and B/P are not assets  because they are not yet acquired as like Plant, building etc. They are yet to be encashed.  Asset means which has been acquired and has some value.
 
Hence, Bills Receivable and Bills Payable are Representative Personal A/cs.
 
Hope you have understood. If not, ask again without hesitation.

Nice explanation friend

praveen

praveen (Chartered Accountant)     28 April 2010

praveen
Chartered Accountant 
 359 likes  6878 points

View Profile | My Other Post

Wonderful explantion

I am seeing such a post from long time


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  



Related Threads


Loading


Trending Tags