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Bills of exchange

kannan (jobless) (263 Points)

22 September 2016

When Drawer discounting his bills and receive cash from bank

in the books of bank the entry is

Bills Discounted A/c Dr.

To Drawer's current A/c
To Discount A/c

👆👆👆👆👆My query is why we are crediting the Drawer's current A/c ... whether it is a liability to the bank?¿

kindly help me

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9 Replies

(Guest)

""""in the books of bank""".......

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kannan (jobless) (263 Points)
Replied 22 September 2016

what is Drawers current account sir....

whether it is a liability?

and what liability?¿

(Guest)

credit the giver.... in one more entry bank will write.... Drawer account DR
TO CASH...(SINCE BANK IS GIVING HIM MONEY)

(Guest)

credit the giver... so bank is Crediting Drawer

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(Guest)

sorry net is slow.. so comment are repeated... in one entry it is Crediting... while give cash bank is debiting him.... SO NO EFFECT.... It can be
Bills discounted account DR
To DISCOUNT(income to bank)
TO cash

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kannan (jobless) (263 Points)
Replied 22 September 2016

Sir, But the bank doesn't show the amount paid by it
as crediting the cash account
...
instead of that it crediting the drawers personal account....

And also after the bill which is dishonoured the bank again debiting his current account .....
so confusing ?¿

(its k sir "Net is slow")

(Guest)

bank Will pay drawer MONEY when he is discounting....(ONLY FOR MONEY DRAWER DISCOUNTS THEM))
NOW the BANK is """Payee.""...On maturity date Drawee pays to bank... If it is dishonoured.. THEN. BANK will Debit Drawer AGAIN...and TREAT HIM AS""" DEBTOR..."""" since he took money from bank while Discounting The bill... now DRAWER is under obligation to repay the same he took while Discounting.. since DRAWEE (debtors) fails to honour the payee(Bank)