C.p.t doubt in accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 October 2013 dishonour of a discounted bill is recorded in csh book .why is it not recorded in bills receivable book?

CA Harish Shyam Choudhary

CA Harish Shyam Choudhary (Expert)
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23 October 2013 Journal Entry

1. Acceptance of bill
Bill receivable a/c Dr.
To Sundry Debtor's A/c

2. Bill Discounted
Bank A/c Dr.
Discount A/c Dr.
To Bill receivable A/c

3. bill dishonored
Sundry Debtors A/c Dr.
To Bank Account

As you can see that bill receivable have been created and on discounted of bill the account have been closed. but at the time of bill dishonored the person have a liability to pay to bank and have an right to receive from sundry creditor

in case of cash, at the time of dishonored of bill, cash have to pay to person who have discounted the bill.

hope so you have understand.

for any further query, feel free to ask.

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