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A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this?
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A bill of exchange receive from Raaz and company for rupees 20000 had ...
Adjustment Entry for Dishonored Bill of Exchange:
Explanation:
- When a bill of exchange received from Raaz and company for rupees 20000 gets dishonored by the bank, it means that Raaz and company failed to make the payment as promised.
- The bank then returns the dishonored bill back to the entity who presented it.
- In this case, the amount of rupees 20000 is credited to the bank account as the bank has to return the amount.
- Simultaneously, the same amount is debited to the bills receivable account to reflect that the bill has been dishonored and the entity has incurred a loss.
- This adjustment entry helps in maintaining accurate financial records and reflecting the true financial position of the entity.
Adjustment Entry:
- Debit: Bills Receivable Account - 20000
- Credit: Bank Account - 20000
This entry ensures that the loss incurred due to the dishonor of the bill is properly recorded in the books of accounts. It also helps in tracking the outstanding bills and managing the cash flow effectively.
Explanation:
- When a bill of exchange received from Raaz and company for rupees 20000 gets dishonored by the bank, it means that Raaz and company failed to make the payment as promised.
- The bank then returns the dishonored bill back to the entity who presented it.
- In this case, the amount of rupees 20000 is credited to the bank account as the bank has to return the amount.
- Simultaneously, the same amount is debited to the bills receivable account to reflect that the bill has been dishonored and the entity has incurred a loss.
- This adjustment entry helps in maintaining accurate financial records and reflecting the true financial position of the entity.
Adjustment Entry:
- Debit: Bills Receivable Account - 20000
- Credit: Bank Account - 20000
This entry ensures that the loss incurred due to the dishonor of the bill is properly recorded in the books of accounts. It also helps in tracking the outstanding bills and managing the cash flow effectively.
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A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this?
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A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this?.
A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A bill of exchange receive from Raaz and company for rupees 20000 had been return by the bank as dishonored and had been credit to the bank and debuted to bills receivable account what is the adjustment entry of this?.
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