Page 284 - VIRANSH COACHING CLASSES

Accounting Treatment in the Books of Drawer and Drawee :

Transaction Books of Drawer Books of Drawee
1 Bill sent to bank for Bill sent for collection A/c ...Dr. There will be no entry
collection To Bills Receivable A/c because Drawee is not a
(Being bill sent to bank for party to the
collection) transaction.
2 Bill sent to bank for Bank A/c ...............................Dr. Bills Payable A/c ..........
collection honoured on the Bank Charges A/c .................Dr. Dr.
due date and Bank charges To Bill sent for collection A/c To Cash / Bank A/c
debited by bank. (Being bill honoured) (Being our acceptance
honoured)

3 Bill sent to bank for Drawee’s A/c .........................Dr. Bills PayableA/c............
collection dishonoured on To Bill sent for collection Dr.
the due date (Being bill sent for collection To Drawer’s A/c
dishonoured) (Being our acceptance
dishonoured)
4 Bill sent to bank for Drawee’s A/c .........................Dr. Bills Payable A/c Dr.
collection dishonoured To Bill sent for collection A/c Noting Charges A/c Dr.
on due date and Noting To Bank A/c To Drawer’s A/c
Charges paid (Being bill sent for collection (Being our acceptance
dishonoured and Noting Charges dishonoured and
paid) Noting Charges payable)

Illustration on Bill sent to the Bank for collection
Anita sold goods to Nita ` 33,500 8 May 2019. On the same day Anita draws a bill of ` 22,500 on
th
Nita for 4 months was accepted by Nita. On 4 April 2019 Anita sent the bill to bank for collection.
th
a) Bill is honoured on the due date and Anita paid bank charges ` 200.
b) Bill is dishonoured on the due date.
c) Bill is dishonoured on the due date and noting charges paid ` 150.

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