Page 281 - VIRANSH COACHING CLASSES

Accounting Treatment in the Books of Drawer, Drawee and Endorsee :
1 Drawer endorses the bill to Endorsee

Books of Drawer / Books of Drawee Books of Endorsee
Endorser
Endorsee’s A/c Dr. There will be no entry as Bills Receivable A/c Dr.
To Bills Receivable A/c Drawee is not a party To Endorser’s A/c
(Being Drawee’s to the transaction (Being Bills Receivable
acceptance endorsed to received from our debtor)
our creditor)
2 Endorsed bill honoured on the due date
Books of Drawer / Books of Drawee Books of Endorsee
Endorser
There will be no entry as Bills Payable A/c Dr. Cash / Bank A/c Dr.
Drawer is not a party to To Cash / Bank A/c To Bills Receivable
the (Being our acceptance A/c
transaction honoured) (Beign Bills Receivable
received honoured)
3 Endorsed bill dishonoured on the due date
Books of Drawer / Books of Drawee Books of Endorsee
Endorser
Drawee’s A/c Dr Bills Payable A/c Dr. Endorser’s A/c Dr.
To Endorsee’s A/c To Drawer’s A/c To Bills Receivable
(Being endorsed bill (Being our acceptance A/c
dishonoured on the due dishonoured) (Being Bills Receivable
date) received dishonoured)
4 Endorsed bill dishonoured and noting charges paid by Endorsee
Books of Drawer / Books of Drawee Books of Endorsee
Drawee’s A/c Dr. Bills Payable A/c Dr. Endorser’s A/c Dr.
To Endorsee’s A/c Noting Charges A/c Dr. To Bills Receivable
(Being endorsed bill To Drawer’s A/c A/c
dishonoured and Noting (Being our acceptance To Cash A/c
Charges paid by endorsee) dishonoured and Noting (Being Bills Receivable
(Amount = Amount of bill Charges payable) received dishonoureed
and Noting Charges) and Noting Charges paid)

Illustration on Endorsement of Bill
Pallavi sold goods of ` 25,000 to Vandana at 10% Trade discount on 16 Feb. 2019. On the same
th
day Vandana accepted a bill drawn on her for the amount due for 3 months. Pallavi endorsed the bill
to her creditor Purva on 18 Feb. 2019.
th
Give journal entries in the books of Pallavi, Vandana and Purva for the following :
a) Bill was honoured on the due date
b) Bill was dishonoured on the due date

c) Bill was dihonoured on the due date and noting charges paid by Purva ` 175.
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