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A bills receivable of Rs. 1,000, which was received from a debtor in full settlement for a claim of Rs. 1,100 is dishonoured.
- a)Purchases Return Book
- b)Bills Receivable Book
- c)Purchases Book
- d)Journal Proper (General journal)
Correct answer is option 'D'. Can you explain this answer?
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A bills receivable of Rs. 1,000, which was received from a debtor in f...
Answer:
Journal Proper (General Journal)
Explanation:
When a bills receivable of Rs. 1,000 is received from a debtor in full settlement for a claim of Rs. 1,100, it is recorded in the Bills Receivable Book. However, if the bill is dishonoured, it needs to be recorded in the Journal Proper or General Journal. This is because the dishonour of a bill affects two accounts, the Bills Receivable account and the Debtor's account.
The entry in the Journal Proper will be as follows:
Debtor's A/c Dr. 1,000
To Bills Receivable A/c 1,000
(Being the dishonour of a bill of Rs. 1,000 received from the debtor in full settlement for a claim of Rs. 1,100)
In this entry, the Debtor's account is debited with Rs. 1,000, which represents the amount received from the debtor, and the Bills Receivable account is credited with Rs. 1,000, which represents the amount of the bill that was dishonoured.
Recording the dishonour of the bill in the Journal Proper ensures that the accounts are accurately updated and reflects the financial position of the business.
Journal Proper (General Journal)
Explanation:
When a bills receivable of Rs. 1,000 is received from a debtor in full settlement for a claim of Rs. 1,100, it is recorded in the Bills Receivable Book. However, if the bill is dishonoured, it needs to be recorded in the Journal Proper or General Journal. This is because the dishonour of a bill affects two accounts, the Bills Receivable account and the Debtor's account.
The entry in the Journal Proper will be as follows:
Debtor's A/c Dr. 1,000
To Bills Receivable A/c 1,000
(Being the dishonour of a bill of Rs. 1,000 received from the debtor in full settlement for a claim of Rs. 1,100)
In this entry, the Debtor's account is debited with Rs. 1,000, which represents the amount received from the debtor, and the Bills Receivable account is credited with Rs. 1,000, which represents the amount of the bill that was dishonoured.
Recording the dishonour of the bill in the Journal Proper ensures that the accounts are accurately updated and reflects the financial position of the business.
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Community Answer
A bills receivable of Rs. 1,000, which was received from a debtor in f...
I think this happens because business man have to record all his transaction to journal and afterwards they can see
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A bills receivable of Rs. 1,000, which was received from a debtor in full settlement for a claim of Rs. 1,100 is dishonoured.a)Purchases Return Bookb)Bills Receivable Bookc)Purchases Bookd)Journal Proper (General journal)Correct answer is option 'D'. Can you explain this answer?
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