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Bills Payable Book


It is maintained like a bills receivable book. It is meant to record all the details, relating to the bills accepted by a person or a party, which are retained for being use in the future, in case of need.
 
The proforma of a bills payable book is given in Fig.8.4
Bills Payable Book

 

No. of Bill

Date of Bill

To whom given

Drawer

Payee

Where payable

Term

Due date

Ledger Folio

Amount Paid

Date

Cash Book Folio

Remarks

                         

 

Entries are made in the bills payable book whenever bills payable are accepted. Immediately, the personal account in the ledger is debited. At the end of the month, the total of bills payable book is posted creditor to whom to the credit of bills payable account in the ledger, thus completing the double entry for bills payable in the ledger.

 

For example, consider the following transactions and observe how these are recorded in bill receivable and bills payable book along with postings in the ledger accounts.

 

Problem#6
  • Jan. 07 Received from S. Mitra bill duly accepted for Rs. 1,32,500 dated January 04, payable three months after date.
  • Jan. 09 Accepted S. Warden's draft for Rs. 9,70,000 at two months.
  • Jan. 13 Pradhan drew on his trader at three months date and the same was accepted for Rs. 39,000.
  • Jan. 14 Drew on R. Rakesh at one month for Rs.25,000 and he accepted the next day.
  • Jan. 18 Gave acceptance at two months for Rs.42,000 to S. Parkar.
  • Jan. 21 Received from G.Ghosh his acceptance for Rs.31,000 at two months.
  • Jan. 22 Received from D.Dhiman, A.Vakil's acceptance for Rs.20,000 at three months from Jan. 17.
  • Jan. 23 K. Kanga accepted my draft at one month for Rs.30,000.
  • Jan. 27 Received from C.Shah bill for Rs. 35,000 dated January 20, accepted by P. Parson and drawn by M.Meyers., payable two months after date.
  • Jan. 31 Gave acceptance for Rs. 21,500 at one month to A. Roberts.
Solution:
Posting of recorded entries are as follow:

Mitra's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 01

Sales

 

1,32,500

________

1,32,500

2006

Jan 07

Bills

Receivable

 

1,32,500

________

1,32,500


R. Rakesh's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 14

Sales

 

25,000

________

25,000

2006

Jan 15

Bills

Receivable

 

25,000

________

25,000

 

G. Gosh's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 21

Sales

 

31,000

________

31,000

2006

Jan 21

Bills

Receivable

 

31,000

________

31,000

D. Dhiman's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 17

Sales

 

20,000

________

20,000

2006

Jan 22

Bills

Receivable

 

20,000

________

20,000

 

K. Kanga's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 23

Sales

 

30,000

________

30,000

2006

Jan 23

Bills

Receivable

 

30,000

________

30,000

C. Shah's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 20

Sales

 

35,000

________

35,000

2006

Jan 27

Bills Receivable

 

35,000

________

35,000

 

Bills Receivables Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 31

Sundries

 

2,73,500

________

2,73,500

2006

Jan 31

Balance C/fd

 

2,73,500

_______

2,73,500

 

S. Warden's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 09

Bills Payable

 

97,000

________

97,000

2006

Jan 09

Purchases

 

97,000

________

97,000


Pradhan's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 13

Bills Payable

 

39,000

________

39,000

2006

Jan 13

Purchases

 

39,000

________

39,000

S. Prakar's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 18

Bills

Payable

 

42,000

________

42,000

2006

Jan 18

Purchases

 

42,000

________

42,000

A. Robert's Account

Dr.             Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 31

Bills Payable

 

21,500

________

21,500

2006

Jan 31

Purchases

 

21,500

________

21,500

Bills Payable Account

Date

Particulars

J.F.

Amount

Rs.

Date

particulars

J.F.

Amount

Rs.

2006

Jan 01

Balance C/d

 

1,99,500

________

1,99,500

2006

Jan 04

Sundries

Receivable

 

1,99,500

_______

1,99,500

 

Note: The drawing and acceptance of a bill always pre-supposes some background of sale or purchase transaction. Therefore, in posting bill transactions from the two books to the accounts of debtors and creditors, it is supposed that the necessary sales and purchases entries have been duly recorded.




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