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Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry?
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Treatment in realisation account -a bill of 40000 discounted from bank...
Treatment in Realisation Account for a Dishonoured Bill of Rs. 40,000:
When a bill of exchange is discounted with a bank and subsequently gets dishonoured, the treatment of the transaction needs to be recorded in the Realisation Account. The Realisation Account is prepared at the time of the dissolution of a partnership firm to record all the assets and liabilities of the firm, including the treatment of dishonoured bills.
The treatment of a dishonoured bill of Rs. 40,000 in the Realisation Account involves the following steps:
Step 1: Calculate the amount to be debited in the Realisation Account.
- Since the bill of Rs. 40,000 got dishonoured, the full amount of the bill needs to be debited in the Realisation Account. Therefore, the debited amount will be Rs. 40,000.
Step 2: Record the journal entry for the dishonoured bill in the Realisation Account.
- The journal entry for the dishonoured bill in the Realisation Account will be as follows:
Realisation Account Dr. Rs. 40,000
To Bank Account (Discounted Bill) Cr. Rs. 40,000
Explanation:
- The Realisation Account is debited with the full amount of the dishonoured bill, i.e., Rs. 40,000, as it represents a loss for the firm.
- The Bank Account (Discounted Bill) is credited with Rs. 40,000 to reverse the earlier entry made at the time of discounting the bill.
Visually Appealing Format:
Treatment in Realisation Account for a Dishonoured Bill of Rs. 40,000:
Step 1: Calculate the amount to be debited in the Realisation Account.
- Debited amount: Rs. 40,000.
Step 2: Record the journal entry for the dishonoured bill in the Realisation Account.
- Journal entry:
- Realisation Account Dr. Rs. 40,000
- To Bank Account (Discounted Bill) Cr. Rs. 40,000
Explanation:
- The Realisation Account is debited with the full amount of the dishonoured bill, i.e., Rs. 40,000.
- The Bank Account (Discounted Bill) is credited with Rs. 40,000 to reverse the earlier entry made at the time of discounting the bill.
When a bill of exchange is discounted with a bank and subsequently gets dishonoured, the treatment of the transaction needs to be recorded in the Realisation Account. The Realisation Account is prepared at the time of the dissolution of a partnership firm to record all the assets and liabilities of the firm, including the treatment of dishonoured bills.
The treatment of a dishonoured bill of Rs. 40,000 in the Realisation Account involves the following steps:
Step 1: Calculate the amount to be debited in the Realisation Account.
- Since the bill of Rs. 40,000 got dishonoured, the full amount of the bill needs to be debited in the Realisation Account. Therefore, the debited amount will be Rs. 40,000.
Step 2: Record the journal entry for the dishonoured bill in the Realisation Account.
- The journal entry for the dishonoured bill in the Realisation Account will be as follows:
Realisation Account Dr. Rs. 40,000
To Bank Account (Discounted Bill) Cr. Rs. 40,000
Explanation:
- The Realisation Account is debited with the full amount of the dishonoured bill, i.e., Rs. 40,000, as it represents a loss for the firm.
- The Bank Account (Discounted Bill) is credited with Rs. 40,000 to reverse the earlier entry made at the time of discounting the bill.
Visually Appealing Format:
Treatment in Realisation Account for a Dishonoured Bill of Rs. 40,000:
Step 1: Calculate the amount to be debited in the Realisation Account.
- Debited amount: Rs. 40,000.
Step 2: Record the journal entry for the dishonoured bill in the Realisation Account.
- Journal entry:
- Realisation Account Dr. Rs. 40,000
- To Bank Account (Discounted Bill) Cr. Rs. 40,000
Explanation:
- The Realisation Account is debited with the full amount of the dishonoured bill, i.e., Rs. 40,000.
- The Bank Account (Discounted Bill) is credited with Rs. 40,000 to reverse the earlier entry made at the time of discounting the bill.
Community Answer
Treatment in realisation account -a bill of 40000 discounted from bank...
No effect on realisation account. Debtors will be increased by 40000 and bank will be decreased by 40000 in balance sheet.
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Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry?
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Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry?.
Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Treatment in realisation account -a bill of 40000 discounted from bank dishonoured and also pass journal entry?.
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