Question No 35 Chapter No 16 – T.S. Grewal 11 Class

Question No 35 Chapter No 16

Question No 35  Chapter No 16

35. An owed B 400. A accepted a Bill of Exchange at 3 months for this amount which B discounted for 380. Give the necessary Journal entries in the books of A and B if this bill is:
a dishonoured on the due date;
b met at maturity and
c retired under rebate at 6% p.a. 2 months before its maturity.

The solution of Question No 35 Chapter No 16:-

Case a   If the bill is dishonoured



Books of B
Date   Particulars
L.F. Debit Credit
  Bills Receivable A/c Dr.   400  
  To Sales A/c       400
  (Being A′s acceptance was received)        
  Bank A/c Dr.   380  
  Discount Charges A/c Dr.   20  
  To Bills Receivable A/c       400
  (Being A′s acceptance was discounted with the bank)        
  A  A/c Dr.   400  
  To Bank A/c       400
  (Being A′s acceptance dishonoured)        

 


Books of A
Date   Particulars
L.F. Debit Credit
  B A/c Dr.   400  
  To Bills Payable A/c       400
  (Being Bill drawn by A was accepted)        
  Bills Payable A/c Dr.   400  
  To B       400
  (Being Bill drawn by B was dishonoured on maturity)        

 

Case b The bills met at maturity



Books of B
Date   Particulars
L.F. Debit Credit
  Bills Receivable A/c Dr.   400  
  To Sales A/c       400
  (Being A′s acceptance was received)        
  Bank A/c Dr.   380  
  Discount Charges A/c Dr.   20  
  To Bills Receivable A/c       400
  (Being A′s acceptance was discounted with the bank)        

 

 


Books of A
Date   Particulars
L.F. Debit Credit
  B A/c Dr.   400  
  To Bills Payable A/c       400
  (Being Bill drawn by A was accepted)        
  Bills Payable A/c Dr.   400  
  To Cash A/c       400
  (Being Bill drawn by B was dishonoured on maturity)        

 

Case c If the bill is retired under rebate at 6% p.a. 2 months before its maturity

 



Books of B
Date   Particulars
L.F. Debit Credit
  Bills Receivable A/c Dr.   400  
  To Sales A/c       400
  (Being A′s acceptance was received)        
  Bank A/c Dr.   396  
  Rebate A/c Dr.   4  
  To Bills Receivable A/c       400
  (Being payment received 2 months before its maturity and giver bate)        


Working Note:

 

Calculation of Discount charges = Bills receivable X Rate X Period of Maturity
100 12

 

  = 400  X 6 X 2
100 12
             

= Rs 4


Books of A
Date   Particulars
L.F. Debit Credit
  B A/c Dr.   400  
  To Bills Payable A/c       400
  (Being Bill drawn by A was accepted)        
  Bills Payable A/c Dr.   400  
  To Cash A/c       396
  To Rebate A/c       4
  (Being payment received 2 months before its maturity and giver bate)        

 

 

 

Bill of exchange (BOE): Meaning and Examples

 

Thanks, Please Like and share with your friends  

Comment if you have any question.

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

Check out T.S. Grewal +1 Book 2019 @ Official Website of Sultan Chand Publication

T.S. Grewals Double Entry Book Keeping - Question No 35 Chapter No 16 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.