Prof. C.A. Sanghita Desai 1 BILLS OF EXCHANGE
BILLS OF EXCHANGE JOURNAL ENTRIES
WHEN THE GOODS ARE SOLD ON CREDIT
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
B’s A/c. Dr. Purchases A/c. Dr.
To Sales To A’s. A/c.
(Being goods sold on credit) (Being goods purchased on credit)
ENTRY WHEN THE BILL IS DRAWN AND ACCEPTED
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Bills Receivable A/c Dr. A’s A/c Dr.
To B ‘s A/c To Bills Payable A/c
(Being the bill accepted for -- Months ) (Being the bill accepted for ____ months.)
SITUATION ENTRIES
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Entry for retaining of the bill
No Entry No Entry
Entry for discounting of the Bill
Cash / Bank A/c. Dr.
Discount A/c Dr.
To Bills Receivable A/c No Entry
(Being the bill discounted with the bank @ ___ % p.a. for ____
months)
Entry for endorsing of the Bill
C’s A/c Dr.
To Bills Receivable A/c No Entry
(Being the bill endorsed )
Entry for sending the bill to bank for Collection
Bill for collection A/c Dr.
To Bills Receivable A/c No Entry
(Being bill sent to Bank for collection)
HONOUR ENTRIES
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Entry when retained bill is honoured Bills Payable A/c. Dr.
Cash / Bank A/c Dr. To Cash / Bank A/c
To Bills Receivable A/c (Being the bill honoured on due date)
(Being the bill honoured on due date)
Entry when discounted bill is honoured Bills Payable A/c Dr.
To Cash / Bank
No Entry (Being the bill honoured on due date)
Entry when endorsed bill is honored Bills Payable A/c Dr.
To Cash / Bank A/c
No Entry (Being the bill honored on due date)
Entry when Bill sent for collection is honoured
Cash / Bank A/c Dr. Bills Payable A/c. Dr.
Bank Charges A/c Dr. To Cash / Bank A/c
To Bill for collection A/c (Being the bill honoured on the due date)
(Being the bill sent to Bank for collection honoured on due date)
DISHONOUR ENTRIES
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Entry when retained bill is dishonoured
B’s A/c Dr. (Amt. of bill + Noting charges) Bills Payable A/c Dr.
To Bills Receivable A/c Noting Charges A/c Dr.
To Cash A/c (N.C.) To A’s A/c
(Being the bill dishonoured on due date and noting charges paid (Being the bill dishonoured on due date)
Rs. ……)
Entry when discounted bill is dishounured Bills Payable A/c Dr.
B’s A/c Dr. (Amount of Bill + N.C.) Noting Charges A/c Dr.
To Bank A/c To A’s A/c
(Being the discounted bill dishonoured on due date and Noting (Being the bill dishonoured on due date)
charges charged Rs. ……)
Entry when endorsed bill is dishonoured Bills Payable A/c Dr.
B’s A/c Dr. (Amt. of bill + N.C Noting Charges A/c Dr.
To C’s A/c To A’s A/c
(Being endorsed bill dishonoured on due date and noting (Being the bill dishonoured on due date)
charges charged Rs. …… )
Entry when Bill sent for collection is dishonoured
B’s A/c Dr. (Amount of Bill + N.C.) Bills Payable A/c Dr.
To Bill for collection A/c (Amt. of Bill) Noting charges A/c Dr.
To Bank A/c (Amount of N.C.) To A’s A/c
(Being bill sent to Bank for collection dishonoured on due date & (Being the bill dishonoured on due date)
BILLS OF EXCHANGE JOURNAL ENTRIES
WHEN THE GOODS ARE SOLD ON CREDIT
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
B’s A/c. Dr. Purchases A/c. Dr.
To Sales To A’s. A/c.
(Being goods sold on credit) (Being goods purchased on credit)
ENTRY WHEN THE BILL IS DRAWN AND ACCEPTED
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Bills Receivable A/c Dr. A’s A/c Dr.
To B ‘s A/c To Bills Payable A/c
(Being the bill accepted for -- Months ) (Being the bill accepted for ____ months.)
SITUATION ENTRIES
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Entry for retaining of the bill
No Entry No Entry
Entry for discounting of the Bill
Cash / Bank A/c. Dr.
Discount A/c Dr.
To Bills Receivable A/c No Entry
(Being the bill discounted with the bank @ ___ % p.a. for ____
months)
Entry for endorsing of the Bill
C’s A/c Dr.
To Bills Receivable A/c No Entry
(Being the bill endorsed )
Entry for sending the bill to bank for Collection
Bill for collection A/c Dr.
To Bills Receivable A/c No Entry
(Being bill sent to Bank for collection)
HONOUR ENTRIES
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Entry when retained bill is honoured Bills Payable A/c. Dr.
Cash / Bank A/c Dr. To Cash / Bank A/c
To Bills Receivable A/c (Being the bill honoured on due date)
(Being the bill honoured on due date)
Entry when discounted bill is honoured Bills Payable A/c Dr.
To Cash / Bank
No Entry (Being the bill honoured on due date)
Entry when endorsed bill is honored Bills Payable A/c Dr.
To Cash / Bank A/c
No Entry (Being the bill honored on due date)
Entry when Bill sent for collection is honoured
Cash / Bank A/c Dr. Bills Payable A/c. Dr.
Bank Charges A/c Dr. To Cash / Bank A/c
To Bill for collection A/c (Being the bill honoured on the due date)
(Being the bill sent to Bank for collection honoured on due date)
DISHONOUR ENTRIES
IN THE BOOKS OF DRAWER (MR. A) IN THE BOOKS OF DRAWEE (MR. B)
Entry when retained bill is dishonoured
B’s A/c Dr. (Amt. of bill + Noting charges) Bills Payable A/c Dr.
To Bills Receivable A/c Noting Charges A/c Dr.
To Cash A/c (N.C.) To A’s A/c
(Being the bill dishonoured on due date and noting charges paid (Being the bill dishonoured on due date)
Rs. ……)
Entry when discounted bill is dishounured Bills Payable A/c Dr.
B’s A/c Dr. (Amount of Bill + N.C.) Noting Charges A/c Dr.
To Bank A/c To A’s A/c
(Being the discounted bill dishonoured on due date and Noting (Being the bill dishonoured on due date)
charges charged Rs. ……)
Entry when endorsed bill is dishonoured Bills Payable A/c Dr.
B’s A/c Dr. (Amt. of bill + N.C Noting Charges A/c Dr.
To C’s A/c To A’s A/c
(Being endorsed bill dishonoured on due date and noting (Being the bill dishonoured on due date)
charges charged Rs. …… )
Entry when Bill sent for collection is dishonoured
B’s A/c Dr. (Amount of Bill + N.C.) Bills Payable A/c Dr.
To Bill for collection A/c (Amt. of Bill) Noting charges A/c Dr.
To Bank A/c (Amount of N.C.) To A’s A/c
(Being bill sent to Bank for collection dishonoured on due date & (Being the bill dishonoured on due date)
