![]() If a partial amount is received from the draweeġ8. If the bill is canceled (for renewal purposes)ġ6. If drawee retires the bill (drawee pays the bill before due date), bill is with drawerġ5. Journal entries under these cases are as follows:ġ4. The drawee pays an additional amount as interest for the extended period. In other cases, the drawee may ask the drawer to cancel the bill and draw another bill for an extended period. Sometimes, the drawee pays the bill before the due date and receives a rebate. If the bill sent for collection is dishonored When the bill sent for collection is metġ3. When Bill Is Sent to Bank for Collection (Option 4)ġ2. If the endorsed bill is met on due dateġ0. When the bill is endorsed (the endorsee is the person to whom the bill is endorsed)ĩ. When Bill Is Endorsed to Third-party Endorsee (Option 3)Ĩ. If the discounted bill is met on due dateħ. When Drawer Holds Bill Until Due Date (Option 1)Ĥ. It is better to learn about journal entries under each of the above cases, after which a detailed accounting treatment will be given. The drawee is liable to meet the drawer's acceptance, but sometimes they fail to do so and dishonor the bill.Īccounting for bills of exchange involves making journal entries and preparing ledger accounts in the books of the drawer and drawee. Once the drawer is the holder of the bill, they can use the bill in several ways: Now, the drawer is the holder of the bill. The drawee returns the bill to the drawer after accepting. Accounting for bills of exchange starts when the drawer draws a bill and the drawee accepts it. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |