Acceptance of a Bill

When a party draws a bill of exchange on another party, the latter has the option to either accept or reject the bill. If the bill is accepted, it becomes a legally binding instrument, and the drawee becomes liable to make payment on the due date.

In this case, Mr B has accepted a bill of Rs. 10000 drawn on him by Mr A on 1st August 2017.

Process of Acceptance

The process of acceptance involves the following steps:

1. Review the Bill: The drawee should carefully review the terms and conditions of the bill before accepting it. This includes verifying the amount, due date, and other details.

2. Sign the Bill: If the drawee agrees to the terms and conditions of the bill, he/she should sign the bill, indicating acceptance. The signature should be written across the face of the bill.

3. Return the Bill: The accepted bill should be returned to the drawer, who can then use it as proof of debt.

Legal Implications

Once a bill is accepted, it becomes a legally binding instrument, and the drawee becomes liable to make payment on the due date. If the drawee fails to make payment on the due date, the drawer can take legal action to recover the amount.

Conclusion

In conclusion, Mr B has accepted a bill of Rs. 10000 drawn on him by Mr A on 1st August 2017. By accepting the bill, Mr B has become legally obligated to make payment on the due date.

In the books of Mr. A
Bills receivable a/c Dr. 10000
To Mr. B 10000