Question

Explain the following with journal entries: Endorsement, Payment on maturity.

Answer 1

Answer:

Endorsement of the bill implies the procedure by which the maker or holder of bill transfers the title of the bill in assistance of his/her creditors. The individual transferring the title is called “Endorser” and the individual to whom the bill is exchanged called “Endorsee”.

The payment for the products bought via online shopping can be made through any of the following ways:

Cash on delivery (COD)

Cheque

Net banking transfer

Credit cards or debit cards : The holders of credit cards are allowed to purchase goods on credit.

In the commercial world maturity means ‘date when payment is due’. The date that comes after adding the 3 days of grace to the due date of the bill is known as ‘date of maturity’.