Question No 23 Chapter No 16 - T.S. Grewal 11 Class

Question No 23 Chapter No 16

23. A bill for 1,000 is drawn by A on B and accepted by the latter payable at the New Bank of India. Show what entries should be passed in the books of A under each of the following circumstances:
a If A retained the bill till the due date and then realized it on maturity.
b If A discounted it with his bankers for 950.
c If A endorsed it to his creditor C in full settlement of his debt.
d If A sent it to his bankers for collection. Also, give the necessary entries in each of the cases if the bill is dishonoured.

The solution of Question No 23 Chapter No 16: –

Books of A
Date	Particulars		L.F.	Debit	Credit
2018
	Bills Receivable A/c	Dr.		1,000
	To B A/c				1,000
	(Being B′s acceptance was received)
	Bank A/c	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Being B′s acceptance honoured)
	On dishonour of the bill
	B A/c	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Being B′s acc bill came dishonoured)

Books of A
Date	Particulars		L.F.	Debit	Credit

	Bills Receivable A/c	Dr.		1,000
	To B A/c				1,000
	(Being B′s acceptance was received)
	Bank A/c	Dr.		950
	Discount Charges A/c	Dr.		50
	To Bills Receivable A/c				1,000
	(Being Bill acceptance discounted with the bank)
	On dishonour of the bill
	B A/c	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Being B′s acceptance dishonoured)

Books of A
Date	Particulars		L.F.	Debit	Credit

	Bills Receivable A/c	Dr.		1,000
	To B A/c				1,000
	(Being B′s acceptance was received)
	C A/c	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Being B′s acceptance endorsed in favour of C)
	On dishonour of the bill
	B A/c	Dr.		1,000
	To C A/c				1,000
	(Being B′s acceptance dishonoured)

Books of A
Date	Particulars		L.F.	Debit	Credit

	Bills Receivable A/c	Dr.		1,000
	To B A/c				1,000
	(Being B′s acceptance was received)
	Bills Sent to Bank for Collection A/c	Dr.		950
	To Bills Receivable A/c				1,000
	(Being Bill Sent to bank for collection)
	On dishonour of the bill
	B A/c	Dr.		1,000
	To Bill Sent to Bank for Collection A/c				1,000
	(Being B′s acceptance dishonoured)

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Also, Check out the solved question of previous Chapters: –

- Chapter No. 1 – Introduction to Accounting
- Chapter No. 2 – Basic Accounting Terms
- Chapter No. 3 – Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards(IFRS)
- Chapter No. 4 – Bases of Accounting
- Chapter No. 5 – Accounting Equation
- Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
- Goods and Services Tax(GST)
- Chapter No. 7 – Origin of Transactions – Source Documents and Preparation of Vouchers
- Chapter No. 8 – Journal
- Chapter No. 9 – Ledger
- Chapter No. 10 – Special Purpose Books I – Cash Book
- Chapter No. 11 – Special Purpose Books II – Other Books
- Chapter No. 12 – Bank Reconciliation Statement
- Chapter No. 13 – Trial Balance
- Chapter No. 14 – Depreciation
- Chapter No. 15 – Provisions and Reserves
- Chapter No. 16 – Accounting for Bills of Exchange
- Chapter No. 17 – Rectification of Errors
- Chapter No. 18 – Financial Statements of Sole Proprietorship
- Chapter No. 19 – Adjustments in preparation of Financial Statements
- Chapter No. 20 – Accounts from incomplete Records – Single Entry System
- Chapter No. 21 – Computers in Accounting
- Chapter No. 22 – Accounting Software – Tally
- Chapter No. 5 – Accounting Equation
- Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
- Goods and Services Tax(GST)
- Chapter No. 8 – Journal
- Chapter No. 9 – Ledger
- Chapter No. 10 – Special Purpose Books I – Cash Book