bills of exchange please answer
Answers
Answer:
in the books of rhea (seller)
deepika a/c Dr 25000
to sales a/c 25000
(being sales made on credit)
bills receivable a/c Dr 25000
to deepika a/c 25000
(being bill acceptance received)
deepika a/c Dr 25000
to Bills receivable a/c 25000
(being bill dishonoured)
in the books of deepika (purchase)
purchase a/c Dr 25000
to rhea a/c 25000
(being purchase made on credit)
rhea a/c Dr 25000
to Bill payable a/c 25000
(being bill accepted and return)
bills payable a/c Dr 25000
to rhea a/c 25000
(being bill dishonoured)
remember : for seller bills is bills receivable which is an asset, asset have Dr balance so when asset increase Dr and when it decrease cr it. same bill is Bill's payable for buyer which is liability and liability have cr balance so when it increase cr decrease Dr and when debtors gives u Bills receivable u cr him since he is no longer your debtors, same with creditor
and when they dishonoured they again become debtors and creditors and bills get cancelled