Page 274 - VIRANSH COACHING CLASSES

Accounting treatment of Bill of Exchange
Bills Receivable being an asset can be dealt in the following ways by the Drawer :

1. Retaining
the bill till
the due date

4. Sending Treatment 2. Discounting
the bill to of Bill of the bill with
bank for Exchange by the bank
collection. Drawer.

3. Endorsing
the bill to the
creditor for
settlement of
account.

Fig.7.3 (a)

1. Retaining the bill till the due date : Drawer can retain the bill till the due date. On the due
date he presents the bill to the Drawee for payment which can be honoured or dishonoured by
the Drawee.

Sells Goods on Credit

Seller Buyer

Draws the Bill
Creditor or Drawer Debtor or Drawee

Drawee accepts the Bill
and send it to Drawer
Holder Acceptor

Presents the bill for payment

Holder Acceptor

Drawee or acceptor
honours the bill on due date
Holder Acceptor

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