Question

honoured our own accptance by cheque 5000

Answer 1

I hope it's helpfulness a few months and a good weekend I will not work in

Answer 2

our own acceptance entails amount Payable by us in the form of negotiable Instruments..Eg.Bills payable in this case

This transaction affects two accounts..

billspayable account (our own acceptance) , Bank account(honoured by Cheque) ..Both of them are Real accounts (all assets and Liabilities come under Real accounts; Bank balance - Asset; Bills payable - liability)


Golden Rule of accounting fof Real assets are

debit what comes in , credit what goes out

or Debit if asset increases/Liability Decreases and credit if asset Decreases/liability increases..


here Billspayable liability is Decreasing and Bank. balance is Decreasing..



So the Journal Entry will be..



Billspayable account Dr 5000

To Bank a/c. 5000

(,being liability settled by Cheque)