Question No 31 Chapter No 16 - T.S. Grewal 11 Class

Question No 31 Chapter No 16

31. X draws a bill on Y for 2,000 on 1st January 2017, Y accepts the same and returns it to X. The bill was drawn by X in full settlement of a debt owing by Y amounted to 2,050. X discounts the bill on the same date with the Central Bank of India for 1,980. At maturity the bill was duly met by Y. Give the entries in the books of X and Y. Suppose the bill is dishonoured, what entries will be passed?

The solution of Question No 31 Chapter No 16:-

Books of X
Date	Particulars		L.F.	Debit	Credit
2017
Jan.01	Bills Receivable A/c	Dr.		2,000
	Discount Allowed A/c	Dr.		50
	To Sales A/c				2,050
	(Being Y′s acceptance was received and discount allowed)
Jan.01	Bank A/c	Dr.		1,980
	Discount Charges A/c	Dr.		20
	To Bills Receivable A/c				2,000
	(Being Y′s acceptance was discounted with the bank)

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Books of Y
Date	Particulars		L.F.	Debit	Credit
2017
Jan.01	Y A/c	Dr.		2,050
	To Bills Payable A/c				2,000
	To Discount Received A/c				50
	(Being goods were bought from X)
Jan.01	Bills Payable A/c	Dr.		2,000
	To Bank A/c				2,000
	(Being Payment made for meeting the bill)

Journal entries – In case bill is dishonoured

Books of X
Date	Particulars		L.F.	Debit	Credit
2017
Jan.01	Bills Receivable A/c	Dr.		2,000
	Discount Allowed A/c	Dr.		50
	To Sales A/c				2,050
	(Being Y′s acceptance was received and discount allowed)
Jan.01	Bank A/c	Dr.		1,980
	Discount Charges A/c	Dr.		20
	To Bills Receivable A/c				2,000
	(Being Y′s acceptance was discounted with the bank)
Jan.01	Y A/c	Dr.		2,050
	To Bank A/c				2,000
	To Discount Allowed A/c				50
	(Being Y′s acceptance became dishonoured)

Books of Y
Date	Particulars		L.F.	Debit	Credit
2017
Jan.01	Y A/c	Dr.		2,050
	To Bills Payable A/c				2,000
	To Discount Received A/c				50
	(Being goods were bought from X)
Jan.01	Bills Payable A/c	Dr.		2,000
	Discount Received A/c	Dr.		50
	To X				2,050
	(Being Payment made for meeting the bill)

Bill of exchange (BOE): Meaning and Examples

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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