NCERT Solutions for Class 11 Accountancy Bills of exchange [Old Book]
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Page 1
NCERT
SOLUTIONS
CLASS - 11th
aglase .co
SOLUTIONS
CLASS - 11th
aglase .co
Page 2
Class : 11th
Subject : Accountancy
Chapter : 8
Chapter Name : Bills of exchange
Q1 Name any two types of commonly used negotiable instruments.
Answer. The two types of commonly used negotiable instruments are:
→ Cheques
→ Bills of exchange
Page : 310 , Block Name : Short Answer
Q2 Write two points of distinction between bills of exchange and promissory note.
Answer.
Basis of Difference Bills of Exchange Promissory Note
Drawer It is drawn by a creditor. It is drawn by a debtor.
Parties There are three parties There are two parties involved,
involved, namely drawer, namely maker and payee.
drawee and payee.
Page : 310 , Block Name : Short Answer
Q3 State any four essential features of bill of exchange.
Answer. The four essential features of bills of exchange are:
→ It must be a written document.
→ It is an unconditional order to pay by the drawer to the drawee.
Subject : Accountancy
Chapter : 8
Chapter Name : Bills of exchange
Q1 Name any two types of commonly used negotiable instruments.
Answer. The two types of commonly used negotiable instruments are:
→ Cheques
→ Bills of exchange
Page : 310 , Block Name : Short Answer
Q2 Write two points of distinction between bills of exchange and promissory note.
Answer.
Basis of Difference Bills of Exchange Promissory Note
Drawer It is drawn by a creditor. It is drawn by a debtor.
Parties There are three parties There are two parties involved,
involved, namely drawer, namely maker and payee.
drawee and payee.
Page : 310 , Block Name : Short Answer
Q3 State any four essential features of bill of exchange.
Answer. The four essential features of bills of exchange are:
→ It must be a written document.
→ It is an unconditional order to pay by the drawer to the drawee.
Page 3
→ The maker of bill must sign it, without which it will not be a legal proof.
→ The amount to be paid along with its expiry date must be specifically mentioned (both in
figures and words) in a bill of exchange.
Page : 310 , Block Name : Short Answer
Q4 State the three parties involved in a bill of exchange.
Answer. The following three parties are involved in a bill of exchange.
→ Drawer who makes the bill
→ Drawee who accepts the bill
→ Payee who receives the payment
Page : 310 , Block Name : Short Answer
Q5 What is meant by maturity of a bill of exchange?
Answer. Maturity of a bill means a date on which the bill is due for payment. Maturity date of the
bill differs on the basis of the terms and conditions of the bill. There are three types of bill, viz.
after date bill, after sight bill and at sight bill.
→ After date bill: In case of after date bill, the payment of the bill is made on the maturity
date of the bill. The maturity date of the bill is ascertained by adding three days of grace
period with the specified period of the bill (which starts from the date of drawing). For
example, if a bill is drawn on 1st March, 2011 and payable after one month; its maturity
date is 4th April. If the maturity date happens to be a gazetted holiday, then the bill is due
for payment one day before. However, if the maturity date happens to be a casual
holiday, then the bill is due for payment after one day.
→ After sight bill: In case of after sight bill, the payment of the bill is made on the maturity
date of the bill. The maturity date of the bill is ascertained by adding three days of grace
period with the specified period of the bill (which starts from the date of acceptance by
the drawee). For example, if a one month bill is drawn on 1st March, 2011 and is
accepted by the drawee on 5th March, 2011; its maturity date is 8th April. In this case, the
date of the bill starts from 5th March and not from 1st March. If the maturity date happens
to be a gazetted holiday, then the bill is payable one day before. However, if the maturity
date happens to be a casual holiday, then the bill is payable after one day.
→ The amount to be paid along with its expiry date must be specifically mentioned (both in
figures and words) in a bill of exchange.
Page : 310 , Block Name : Short Answer
Q4 State the three parties involved in a bill of exchange.
Answer. The following three parties are involved in a bill of exchange.
→ Drawer who makes the bill
→ Drawee who accepts the bill
→ Payee who receives the payment
Page : 310 , Block Name : Short Answer
Q5 What is meant by maturity of a bill of exchange?
Answer. Maturity of a bill means a date on which the bill is due for payment. Maturity date of the
bill differs on the basis of the terms and conditions of the bill. There are three types of bill, viz.
after date bill, after sight bill and at sight bill.
→ After date bill: In case of after date bill, the payment of the bill is made on the maturity
date of the bill. The maturity date of the bill is ascertained by adding three days of grace
period with the specified period of the bill (which starts from the date of drawing). For
example, if a bill is drawn on 1st March, 2011 and payable after one month; its maturity
date is 4th April. If the maturity date happens to be a gazetted holiday, then the bill is due
for payment one day before. However, if the maturity date happens to be a casual
holiday, then the bill is due for payment after one day.
→ After sight bill: In case of after sight bill, the payment of the bill is made on the maturity
date of the bill. The maturity date of the bill is ascertained by adding three days of grace
period with the specified period of the bill (which starts from the date of acceptance by
the drawee). For example, if a one month bill is drawn on 1st March, 2011 and is
accepted by the drawee on 5th March, 2011; its maturity date is 8th April. In this case, the
date of the bill starts from 5th March and not from 1st March. If the maturity date happens
to be a gazetted holiday, then the bill is payable one day before. However, if the maturity
date happens to be a casual holiday, then the bill is payable after one day.
Page 4
→ At sight bill: In case of at sight bill, the due date of the bill is considered as and when the
bill is presented for payment by the holder of the bill. In this case, there is no grace
period. The bill becomes due whenever it is presented for payment.
Page : 310 , Block Name : Short Answer
Q6 What is meant by dishonour of a bill of exchange?
Answer. Dishonour of a bill happens when the acceptor of the bill fails to make the payment on
the date of maturity of the bill. Hence, liability of the acceptor is restored. Entries made for
recording dishonour of the bill of exchange are reverse of the entries of recording drawing of the
bill.
In the books of drawer
Acceptor A/c. Dr
To Bills Receivable A/c
(Being bill dishonoured)
In the books of acceptor/drawee
Bills Payable A/c. Dr.
To Drawer A/c
(Being bill dishonoured)
Page : 310 , Block Name : Short Answer
Q7 Name the parties to a promissory note
Answer. The parties to a promissory note are given below.
→ Promissor, who makes the note and undertakes to pay the amount of promissory note.
→ Payee, who receives the payment.
bill is presented for payment by the holder of the bill. In this case, there is no grace
period. The bill becomes due whenever it is presented for payment.
Page : 310 , Block Name : Short Answer
Q6 What is meant by dishonour of a bill of exchange?
Answer. Dishonour of a bill happens when the acceptor of the bill fails to make the payment on
the date of maturity of the bill. Hence, liability of the acceptor is restored. Entries made for
recording dishonour of the bill of exchange are reverse of the entries of recording drawing of the
bill.
In the books of drawer
Acceptor A/c. Dr
To Bills Receivable A/c
(Being bill dishonoured)
In the books of acceptor/drawee
Bills Payable A/c. Dr.
To Drawer A/c
(Being bill dishonoured)
Page : 310 , Block Name : Short Answer
Q7 Name the parties to a promissory note
Answer. The parties to a promissory note are given below.
→ Promissor, who makes the note and undertakes to pay the amount of promissory note.
→ Payee, who receives the payment.
Page 5
Page : 310 , Block Name : Short Answer
Q8 What is meant by acceptance of a bill of exchange?
Answer A bill is drawn in favour of a person from whom the amount is due. In other words, a bill
of exchange is drawn by the creditor on the debtor to make payment of a specific amount, on a
mentioned date. Generally, a bill is drawn by a seller to a purchaser. Purchaser accepts the bill
for the amount due on account of the credit sales. The bill may be accepted for the amount due
other than credit purchases, such as commission payable, salary outstanding, etc. A bill cannot
come into existence without the acceptance of a debtor.
Page : 310 , Block Name : Short Answer
Q9 What is Noting of a bill of exchange?
Answer. When a bill is presented for payment and acceptor fails to make payment, the bill gets
dishonoured. In order to keep a legal proof of dishonour, the bill gets noted by the Notary public
(which is approved by the government). In exchange of the Notary service, Notary public
charges fees, known as Noting charges. Notary public notes the following facts:
→ Date and amount of the bill
→ Reasons for dishonour
→ Amount of Noting charges
Page : 310 , Block Name : Short Answer
Q10 What is meant by renewal of a bill of exchange?
Answer. When an acceptor of a bill does not have sufficient fund to meet the obligations of the
bill on time, he requests the drawer for an extension (of time) for payment. If the drawer agrees,
then a new bill is drawn, this is known as renewal of bill. Generally, a bill is renewed on the
condition that the drawee has to pay interest for the extended period.
Q8 What is meant by acceptance of a bill of exchange?
Answer A bill is drawn in favour of a person from whom the amount is due. In other words, a bill
of exchange is drawn by the creditor on the debtor to make payment of a specific amount, on a
mentioned date. Generally, a bill is drawn by a seller to a purchaser. Purchaser accepts the bill
for the amount due on account of the credit sales. The bill may be accepted for the amount due
other than credit purchases, such as commission payable, salary outstanding, etc. A bill cannot
come into existence without the acceptance of a debtor.
Page : 310 , Block Name : Short Answer
Q9 What is Noting of a bill of exchange?
Answer. When a bill is presented for payment and acceptor fails to make payment, the bill gets
dishonoured. In order to keep a legal proof of dishonour, the bill gets noted by the Notary public
(which is approved by the government). In exchange of the Notary service, Notary public
charges fees, known as Noting charges. Notary public notes the following facts:
→ Date and amount of the bill
→ Reasons for dishonour
→ Amount of Noting charges
Page : 310 , Block Name : Short Answer
Q10 What is meant by renewal of a bill of exchange?
Answer. When an acceptor of a bill does not have sufficient fund to meet the obligations of the
bill on time, he requests the drawer for an extension (of time) for payment. If the drawer agrees,
then a new bill is drawn, this is known as renewal of bill. Generally, a bill is renewed on the
condition that the drawee has to pay interest for the extended period.
Page 6
Page : 310 , Block Name : Short Answer
Q11 Give the performa of a Bills Receivable Book.
Answer. The given format shows a bills receivable book.
D Rece Ca
Serial at ived Wh D Led sh
Date
Numb e From Dra Acce ere Te ue ger Am Bo Rem
Rece
er of of Who wer ptor pay rm da Foli ount ok arks
ived
Bill Bil m able te o Fo
l lio
Page : 310 , Block Name : Short Answer
Q12 Give the performa of a Bills Payable Book.
Answer.
Giv Ca
Paya Ter
Serial Da en Du Led sh
ble m Amo
Numb te To Dra Pay e ger Da Bo Rem
Whe of unt
erof of Wh wer ee Da Foli te ok arks
re Bill Paid
Bill Bill om te o Fol
io
Q11 Give the performa of a Bills Receivable Book.
Answer. The given format shows a bills receivable book.
D Rece Ca
Serial at ived Wh D Led sh
Date
Numb e From Dra Acce ere Te ue ger Am Bo Rem
Rece
er of of Who wer ptor pay rm da Foli ount ok arks
ived
Bill Bil m able te o Fo
l lio
Page : 310 , Block Name : Short Answer
Q12 Give the performa of a Bills Payable Book.
Answer.
Giv Ca
Paya Ter
Serial Da en Du Led sh
ble m Amo
Numb te To Dra Pay e ger Da Bo Rem
Whe of unt
erof of Wh wer ee Da Foli te ok arks
re Bill Paid
Bill Bill om te o Fol
io
Page 7
Page : 310 , Block Name : Short Answer
Q13 What is retirement of a bill of exchange?
Answer. When a holder receives the amount of a bill before the maturity date on the request of
the acceptor, then it is called retirement of the bill of exchange. Holder of the bill may give
discount for such earlier payment. This discount is termed as ‘rebate’.
Entry in the books of the holder of the bill
Cash A/c. Dr.
Rebate A/c. Dr.
To Bills Receivable A/c
(Being bill amount received before maturity and
rebate allowed)
Entry in the books of the acceptor (drawee) of the bill
Bills Payable A/c. Dr.
To Cash A/c
To Rebate A/c
(Bill paid and received rebate for early
payment)
Page : 310 , Block Name : Short Answer
Q14 Give the meaning of rebate.
Q13 What is retirement of a bill of exchange?
Answer. When a holder receives the amount of a bill before the maturity date on the request of
the acceptor, then it is called retirement of the bill of exchange. Holder of the bill may give
discount for such earlier payment. This discount is termed as ‘rebate’.
Entry in the books of the holder of the bill
Cash A/c. Dr.
Rebate A/c. Dr.
To Bills Receivable A/c
(Being bill amount received before maturity and
rebate allowed)
Entry in the books of the acceptor (drawee) of the bill
Bills Payable A/c. Dr.
To Cash A/c
To Rebate A/c
(Bill paid and received rebate for early
payment)
Page : 310 , Block Name : Short Answer
Q14 Give the meaning of rebate.
Page 8
Answer. If the drawee of a bill expresses their wish to pay the bill before the due date to the
holder, and if the holder accepts their request, then on account of the early payment, the holder
may give some discount. This discount is termed as rebate. In other words, rebate is a discount
given by the holder to the drawee (or acceptor) for early payment of the bill before the due date.
It is an expense for the drawer and hence, is debited to the drawer’s books. On the other hand,
as it is a gain for the acceptor of bill, so it is credited in the drawee’s books.
Entry in the books of drawer of the bill:
Cash A/c. Dr.
Rebate A/c. Dr.
To Bills Receivable A/c
(Being bill honoured before maturity)
Entry in the books of drawee of the bill:
Bills Payable A/c. Dr.
To Cash A/c
To Rebate A/c
(Bill paid and rebate received)
Page : 310 , Block Name : Short Answer
Q15 Give the performa of a Bill of Exchange.
Answer. Performa of a Bill of exchange is given below.
(The Drawer) Place
Rs. 10,000
Date
Two months after date pay to me or my order, the sum of rupees ten thousand only, for value
received
holder, and if the holder accepts their request, then on account of the early payment, the holder
may give some discount. This discount is termed as rebate. In other words, rebate is a discount
given by the holder to the drawee (or acceptor) for early payment of the bill before the due date.
It is an expense for the drawer and hence, is debited to the drawer’s books. On the other hand,
as it is a gain for the acceptor of bill, so it is credited in the drawee’s books.
Entry in the books of drawer of the bill:
Cash A/c. Dr.
Rebate A/c. Dr.
To Bills Receivable A/c
(Being bill honoured before maturity)
Entry in the books of drawee of the bill:
Bills Payable A/c. Dr.
To Cash A/c
To Rebate A/c
(Bill paid and rebate received)
Page : 310 , Block Name : Short Answer
Q15 Give the performa of a Bill of Exchange.
Answer. Performa of a Bill of exchange is given below.
(The Drawer) Place
Rs. 10,000
Date
Two months after date pay to me or my order, the sum of rupees ten thousand only, for value
received
Page 9
(Signed)
(The drawer)
Place
Accepted
(Signed)
To
(The Drawee)
Date
Place
Page : 310 , Block Name : Short Answer
Q1 A bill of exchange must contain an unconditional promise to pay. Do you agree with a
statement?
Answer. According to Negotiable Instrument Act, 1981, “A bill of exchange is defined as an
instrument in writing, containing an unconditional order, signed by the maker, directing a certain
person to pay a certain sum of money only to, or to the order of, a certain person or to the
bearer of the instrument".
An unconditional order to pay: It is one of the important characteristic of a negotiable instrument.
Unconditional order implies no condition should be attached by the acceptor regarding the
payment. The conditions like, payment of bill (only in case of profit on sales), payment of bill
(only if the prices of goods increase), etc. should not be attached with the bill. Therefore, I agree
to the statement of unconditional promise to pay.
Page : 310 , Block Name : Long Answer
Q2 Briefly explain the effects of dishonour and noting of a bill of exchange.
(The drawer)
Place
Accepted
(Signed)
To
(The Drawee)
Date
Place
Page : 310 , Block Name : Short Answer
Q1 A bill of exchange must contain an unconditional promise to pay. Do you agree with a
statement?
Answer. According to Negotiable Instrument Act, 1981, “A bill of exchange is defined as an
instrument in writing, containing an unconditional order, signed by the maker, directing a certain
person to pay a certain sum of money only to, or to the order of, a certain person or to the
bearer of the instrument".
An unconditional order to pay: It is one of the important characteristic of a negotiable instrument.
Unconditional order implies no condition should be attached by the acceptor regarding the
payment. The conditions like, payment of bill (only in case of profit on sales), payment of bill
(only if the prices of goods increase), etc. should not be attached with the bill. Therefore, I agree
to the statement of unconditional promise to pay.
Page : 310 , Block Name : Long Answer
Q2 Briefly explain the effects of dishonour and noting of a bill of exchange.
Page 10
Answer. When a bill is presented for payment and the acceptor fails to make the payment, the
bill gets dishonoured. In this situation, liability of the acceptor is restored.
Entry in the books of drawer (if Noting charges are not paid):
Drawee. Dr.
To Bills Receivable A/c
(Being bill dishonoured)
Entry in the books of drawee:
Bills Payable A/c. Dr.
To Drawer
(Being bill dishonoured)
Noting charges are charged by the notary public for keeping a proof that the bill is dishonoured.
The noting charges are paid by the holder of the bill but actually due on the drawee or the
acceptor of the bill..
Notary public notes the below given facts.
→ Date and amount of bill
→ Reasons for dishonour
→ Amount of noting charges
Effect of Noting charges in the books of holder of bill (if Noting charges are paid):
Drawee. Dr.
To Bills Receivable A/c
To Cash A/c (Noting charges)
(Being bill dishonoured and Noting
charges paid)
In the books of drawee:
Bills Payable A/c. Dr.
Noting charges A/c. Dr.
To Drawer
(Being bill dishonoured and Noting
charges due)
bill gets dishonoured. In this situation, liability of the acceptor is restored.
Entry in the books of drawer (if Noting charges are not paid):
Drawee. Dr.
To Bills Receivable A/c
(Being bill dishonoured)
Entry in the books of drawee:
Bills Payable A/c. Dr.
To Drawer
(Being bill dishonoured)
Noting charges are charged by the notary public for keeping a proof that the bill is dishonoured.
The noting charges are paid by the holder of the bill but actually due on the drawee or the
acceptor of the bill..
Notary public notes the below given facts.
→ Date and amount of bill
→ Reasons for dishonour
→ Amount of noting charges
Effect of Noting charges in the books of holder of bill (if Noting charges are paid):
Drawee. Dr.
To Bills Receivable A/c
To Cash A/c (Noting charges)
(Being bill dishonoured and Noting
charges paid)
In the books of drawee:
Bills Payable A/c. Dr.
Noting charges A/c. Dr.
To Drawer
(Being bill dishonoured and Noting
charges due)
Page 11
Page : 310 , Block Name : Long Answer
Q3 Explain briefly the procedure of calculating the date of maturity of a bill of exchange? Give
example.
Answer. The procedure to calculate the date of maturity of a bill of exchange is given below.
→ Ascertaining the date on which the bill will be honoured.
→ Adding three days of grace to the above date.
For example, a bill with maturity period of one month is drawn on 1st July and due date is
1st September. Then add 3 days of grace and payment will be made on 4th September.
Days of grace depend on the following situations:
1. Declared holidays: If the payment day happens to be a national holiday or Sunday, then the
preceding day becomes the payment day.
For example,
→ If a bill is drawn on 12th July and its due date is 12th August, then after adding 3 days of
grace the maturity day is 15th August. However, as 15th August is a national holiday; so,
14thAugust becomes the payment day.
→ If a bill is drawn on 1st May and the maturity period is of one month, then the due date is
1st June. After adding 3 days of grace, the payment date becomes 4th June. However, if
4th June happens to be a Sunday, then the payment will be made on 3rd June.
2. Undeclared holidays: If the payment day happens to be an emergency holiday, then the
succeeding day becomes the payment day. For example, if a bill is drawn on 1st May and is
payable after 15 days, then, after adding 3 days of grace period, the due date becomes
18th May. However, if a national strike is declared on 18th May, then 19th May becomes the due
date of the bill.
Page : 310 , Block Name : Long Answer
Q4 Distinguish between bill of exchange and promissory note.
Answer.
Q3 Explain briefly the procedure of calculating the date of maturity of a bill of exchange? Give
example.
Answer. The procedure to calculate the date of maturity of a bill of exchange is given below.
→ Ascertaining the date on which the bill will be honoured.
→ Adding three days of grace to the above date.
For example, a bill with maturity period of one month is drawn on 1st July and due date is
1st September. Then add 3 days of grace and payment will be made on 4th September.
Days of grace depend on the following situations:
1. Declared holidays: If the payment day happens to be a national holiday or Sunday, then the
preceding day becomes the payment day.
For example,
→ If a bill is drawn on 12th July and its due date is 12th August, then after adding 3 days of
grace the maturity day is 15th August. However, as 15th August is a national holiday; so,
14thAugust becomes the payment day.
→ If a bill is drawn on 1st May and the maturity period is of one month, then the due date is
1st June. After adding 3 days of grace, the payment date becomes 4th June. However, if
4th June happens to be a Sunday, then the payment will be made on 3rd June.
2. Undeclared holidays: If the payment day happens to be an emergency holiday, then the
succeeding day becomes the payment day. For example, if a bill is drawn on 1st May and is
payable after 15 days, then, after adding 3 days of grace period, the due date becomes
18th May. However, if a national strike is declared on 18th May, then 19th May becomes the due
date of the bill.
Page : 310 , Block Name : Long Answer
Q4 Distinguish between bill of exchange and promissory note.
Answer.
Page 12
Basis of Difference Bills of Exchange Promissory Note
Order or promise It is an order to pay. It is a promise to pay.
Parties There are three parties involved, There are two parties involved,
drawer, acceptor and payee. maker and payee.
Drawer It is drawn by the creditor. It is drawn by the debtors.
Acceptance It needs acceptance by the As it is prepared by promissor, so
drawee. no acceptance is required.
Payee Drawer and payee may be the Promissor cannot be the payee.
same.
Noting In case of dishonour of the bill, Noting is not necessary.
the bill may get noted.
Liability Drawer is not primarily liable. Promissor is the primarily liable.
Page : 310 , Block Name : Long Answer
Q5 Briefly explain the purpose and benefits of retiring a bill of exchange to the debtor and the
creditor.
Answer. When a holder receives the amount of a bill before the maturity date on request of the
acceptor, it is called retirement of the bill of exchange. Holder of the bill may give discount for
such earlier payment. This discount is termed as ‘rebate’.
Rebate is given by the holder to the acceptor of the bill on account of payment before the due
date. Rebate is a loss for the holder of the bill; so, it is debited in the books of the holder when
payment is received.
Cash A/c. Dr.
Rebate A/c. Dr.
To Bills Receivable A/c
(Being payment received and rebate allowed for early
payment)
Acceptor of the bill gets rebate for the payment made before the due date. The rebate is a gain
for the drawee; so, it is credited in the books of the drawee.
Bills Payable A/c. Dr.
To Cash A/c
To Rebate A/c
(Being bill paid before the due date and rebate received for
early payment)
Order or promise It is an order to pay. It is a promise to pay.
Parties There are three parties involved, There are two parties involved,
drawer, acceptor and payee. maker and payee.
Drawer It is drawn by the creditor. It is drawn by the debtors.
Acceptance It needs acceptance by the As it is prepared by promissor, so
drawee. no acceptance is required.
Payee Drawer and payee may be the Promissor cannot be the payee.
same.
Noting In case of dishonour of the bill, Noting is not necessary.
the bill may get noted.
Liability Drawer is not primarily liable. Promissor is the primarily liable.
Page : 310 , Block Name : Long Answer
Q5 Briefly explain the purpose and benefits of retiring a bill of exchange to the debtor and the
creditor.
Answer. When a holder receives the amount of a bill before the maturity date on request of the
acceptor, it is called retirement of the bill of exchange. Holder of the bill may give discount for
such earlier payment. This discount is termed as ‘rebate’.
Rebate is given by the holder to the acceptor of the bill on account of payment before the due
date. Rebate is a loss for the holder of the bill; so, it is debited in the books of the holder when
payment is received.
Cash A/c. Dr.
Rebate A/c. Dr.
To Bills Receivable A/c
(Being payment received and rebate allowed for early
payment)
Acceptor of the bill gets rebate for the payment made before the due date. The rebate is a gain
for the drawee; so, it is credited in the books of the drawee.
Bills Payable A/c. Dr.
To Cash A/c
To Rebate A/c
(Being bill paid before the due date and rebate received for
early payment)
Page 13
Page : 310 , Block Name : Long Answer
Q6 Explain briefly the purpose and advantages of maintaining of a Bills Receivable Book.
Answer. Bills Receivable Book is a special purpose book that is maintained to keep records of
bills received from the debtors. It contains details such as acceptor’s name, date of bill, due
date, amount, etc. for future references. It is totalled periodically and its balance is transferred to
the debit side of the bills receivable account.
Benefits of Maintaining the Bill Receivable Book
→ Availability of information: All the information related to the bills receivable, such as
amount, due date, etc., are recorded at one place and hence are easily accessible.
→ Possibility of fraud: Since all the bills are recorded at one place, possibility of fraud is
minimised.
→ Responsibility: The person who maintains the bills receivable book will also be
responsible for any errors or omissions. Therefore, higher degree of accountability and
responsibility exists. Also, if any error is detected, then it can be fixed quickly.
→ Time efficient: Recording of bills receivable through the bills receivable book takes lesser
time than that of journal entry. Therefore, it saves time of the accountant in recording
numerous transactions of repetitive and routine nature.
Page : 310 , Block Name : Long Answer
Q7 Briefly explain the benefits of maintaining a Bills Payable Book and state how is its posting is
done in the ledger?
Answer. A Bills Payable Book is a special purpose book, maintained to keep records of
acceptance of bills, given to the creditors. It contains details of the amount, date of bill, due
date, to whom acceptance is given, etc., for future references. It is totalled periodically and its
balance is transferred to the credit side of the bills payable account.
Benefits of Maintaining Bills Payable Book
→ Availability of information: All the information related to the bills payable are recorded at
one place, such as the amount, due date, etc.
→ Possibility of fraud: Since all the bills are recorded at one place, possibility of fraud is
minimised.
Q6 Explain briefly the purpose and advantages of maintaining of a Bills Receivable Book.
Answer. Bills Receivable Book is a special purpose book that is maintained to keep records of
bills received from the debtors. It contains details such as acceptor’s name, date of bill, due
date, amount, etc. for future references. It is totalled periodically and its balance is transferred to
the debit side of the bills receivable account.
Benefits of Maintaining the Bill Receivable Book
→ Availability of information: All the information related to the bills receivable, such as
amount, due date, etc., are recorded at one place and hence are easily accessible.
→ Possibility of fraud: Since all the bills are recorded at one place, possibility of fraud is
minimised.
→ Responsibility: The person who maintains the bills receivable book will also be
responsible for any errors or omissions. Therefore, higher degree of accountability and
responsibility exists. Also, if any error is detected, then it can be fixed quickly.
→ Time efficient: Recording of bills receivable through the bills receivable book takes lesser
time than that of journal entry. Therefore, it saves time of the accountant in recording
numerous transactions of repetitive and routine nature.
Page : 310 , Block Name : Long Answer
Q7 Briefly explain the benefits of maintaining a Bills Payable Book and state how is its posting is
done in the ledger?
Answer. A Bills Payable Book is a special purpose book, maintained to keep records of
acceptance of bills, given to the creditors. It contains details of the amount, date of bill, due
date, to whom acceptance is given, etc., for future references. It is totalled periodically and its
balance is transferred to the credit side of the bills payable account.
Benefits of Maintaining Bills Payable Book
→ Availability of information: All the information related to the bills payable are recorded at
one place, such as the amount, due date, etc.
→ Possibility of fraud: Since all the bills are recorded at one place, possibility of fraud is
minimised.
Page 14
→ Responsibility: All the transactions are recorded by the same person. Therefore, errors
can be easily detected and rectified. This leads to a higher degree of responsibility and
accountability of the accountant.
Page : 310 , Block Name : Long Answer
Q1 On Jan 01, 2016 Rao sold goods Rs 10,000 to Reddy. Half of the payment was made
immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after
30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill
to Reddy and received the payment Journalise the above transactions in the books Rao and
prepare of Rao’s account in the books of Reddy
Date Particulars L. Debit amount Credit amount
F. ₹ ₹
2016 Reddy's A/c Dr.
Jan 1 To sales A/c
(Being goods sold to Reddy)
Cash A/c Dr.
To Reddy's A/c
(Being cash received from Reddy)
.
Answer.
Books of Reddy
Rao'sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
Jan.01 5,000 2011
Cash
Jan.01 5,000 Jan.01 10,000
Bills Receivable Purchases
10,000 10,000
can be easily detected and rectified. This leads to a higher degree of responsibility and
accountability of the accountant.
Page : 310 , Block Name : Long Answer
Q1 On Jan 01, 2016 Rao sold goods Rs 10,000 to Reddy. Half of the payment was made
immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after
30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill
to Reddy and received the payment Journalise the above transactions in the books Rao and
prepare of Rao’s account in the books of Reddy
Date Particulars L. Debit amount Credit amount
F. ₹ ₹
2016 Reddy's A/c Dr.
Jan 1 To sales A/c
(Being goods sold to Reddy)
Cash A/c Dr.
To Reddy's A/c
(Being cash received from Reddy)
.
Answer.
Books of Reddy
Rao'sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
Jan.01 5,000 2011
Cash
Jan.01 5,000 Jan.01 10,000
Bills Receivable Purchases
10,000 10,000
Page 15
Page : 310 , Block Name : Numerical Questions
Q2 On Jan 01,2016, Shankar purchased goods from Parvati for Rs 8,000 and immediately drew
a promissory note in favour of Parvati payable after 3 months. On the date of maturity of the
promissory note, the Government of India declared holiday under the Negotiable Instrument Act
1881. Since, Parvati was unaware about the provision of the law regarding the date of maturity
of the bill, she handed over the bill to her lawyer, who duly presented the bill and received the
payment. The amount of the bill was handed over by the lawyer to Parvati immediately. Record
the necessary Journal entries in the books of Parvati and Shankar.
Answer. Books of Parvati
Journal
Debit Credit
Date L.F. Amount Amount
Particulars
Rs Rs
2016
Jan.01 Shankar Dr. 8,000
To Sales A/c 8,000
(Goods sold to Shankar) to
Jan.01 Bills Receivable A/c Dr. 8,000
To Shankar 8,000
(Promissory Note received from Shankar for
three months)
Apr.05 Cash A/c Dr. 8,000
To Bills Receivable A/c 8,000
(Cash received for Promissory Note one day after the
maturity date on account of holiday declared by Govt.)
Q2 On Jan 01,2016, Shankar purchased goods from Parvati for Rs 8,000 and immediately drew
a promissory note in favour of Parvati payable after 3 months. On the date of maturity of the
promissory note, the Government of India declared holiday under the Negotiable Instrument Act
1881. Since, Parvati was unaware about the provision of the law regarding the date of maturity
of the bill, she handed over the bill to her lawyer, who duly presented the bill and received the
payment. The amount of the bill was handed over by the lawyer to Parvati immediately. Record
the necessary Journal entries in the books of Parvati and Shankar.
Answer. Books of Parvati
Journal
Debit Credit
Date L.F. Amount Amount
Particulars
Rs Rs
2016
Jan.01 Shankar Dr. 8,000
To Sales A/c 8,000
(Goods sold to Shankar) to
Jan.01 Bills Receivable A/c Dr. 8,000
To Shankar 8,000
(Promissory Note received from Shankar for
three months)
Apr.05 Cash A/c Dr. 8,000
To Bills Receivable A/c 8,000
(Cash received for Promissory Note one day after the
maturity date on account of holiday declared by Govt.)
Page 16
Answer.
Books of Shankar
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Purchases A/c Dr. 8,000
To Parvati 8,000
(Goods purchased from Parvati)
Jan.01 Parvati Dr. 8,000
To Bills Payable A/c 8,000
(Promissory note for three months sent to
Parvati)
Apr.5 Bills Payable A/c Dr. 8,000
To Cash A/c 8,000
(Cash paid on maturity of promissory note)
Note: Here, it has been assumed holiday on Apr.04, 2016 is emergency holiday if it had
gazetted holiday, the Promissory Note should have been discharged on Apr.05, 2011.
Page : 311 , Block Name : Numerical Questions
Q3 Vishal sold goods for Rs 7,000 to Manju on Jan 05, 2016 and drew upon her a bill of
exchange payable after 2 months. Manju accepted Vishal’s draft and handed over the same to
Vishal after acceptance. Vishal immediately discounted the bill with his bank@12% p.a. On the
due date Manju met her acceptance. Journalise the above transactions in the books of Vishal
and Manju.
Books of Shankar
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Purchases A/c Dr. 8,000
To Parvati 8,000
(Goods purchased from Parvati)
Jan.01 Parvati Dr. 8,000
To Bills Payable A/c 8,000
(Promissory note for three months sent to
Parvati)
Apr.5 Bills Payable A/c Dr. 8,000
To Cash A/c 8,000
(Cash paid on maturity of promissory note)
Note: Here, it has been assumed holiday on Apr.04, 2016 is emergency holiday if it had
gazetted holiday, the Promissory Note should have been discharged on Apr.05, 2011.
Page : 311 , Block Name : Numerical Questions
Q3 Vishal sold goods for Rs 7,000 to Manju on Jan 05, 2016 and drew upon her a bill of
exchange payable after 2 months. Manju accepted Vishal’s draft and handed over the same to
Vishal after acceptance. Vishal immediately discounted the bill with his bank@12% p.a. On the
due date Manju met her acceptance. Journalise the above transactions in the books of Vishal
and Manju.
Page 17
Answer.
Books of Vishal
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.05 Manju Dr. 7,000
To Sales A/c 7,000
(Goods sold to Manju)
Jan.05 Bills Receivable A/c Dr. 7,000
To Manju 7,000
(Manju's acceptance received for two months)
Jan.05 Bank A/c Dr. 6,860
Discount A/c Dr. 140 7,000
To Bills Receivable A/c
(Bill Receivable discounted with the bank @ 12 %
p.a. for two months)
Books of Manju
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Books of Vishal
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.05 Manju Dr. 7,000
To Sales A/c 7,000
(Goods sold to Manju)
Jan.05 Bills Receivable A/c Dr. 7,000
To Manju 7,000
(Manju's acceptance received for two months)
Jan.05 Bank A/c Dr. 6,860
Discount A/c Dr. 140 7,000
To Bills Receivable A/c
(Bill Receivable discounted with the bank @ 12 %
p.a. for two months)
Books of Manju
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Page 18
Jan.05 Purchases A/c Dr. 7,000
To Vishal 7,000
(Goods purchased from Vishal)
Jan.05 Vishal Dr. 7,000
To Bills Payable A/c 7,000
(Bill drawn by Vishal accepted)
Mar.08 Bills Payable A/c Dr. 7,000
To Bank A/c 7,000
(Amount of Bill Payable paid to bank on maturity)
Page : 311 , Block Name : Numerical Questions
Q4 On Feb 01, 2016, John purchased goods for Rs 15,000 from Jimmi. He immediately made a
payment of Rs 5,000 by cheque and for the balance accepted the bill of exchange drawn upon
him by Jimmi. The bill of exchange was payable after 40 days. Five days before the maturity of
the bill, Jimmi sent the same to his bank for collection. The bank duly presented the bill to John
on the due date who met the bill. The bank informed the same to Jimmi. Prepare John’s account
in the books of Jimmi and Jimmi account in the books of John.
Answer.
Books of Jimmi
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 John Dr. 15,000
To Sales 15,000
To Vishal 7,000
(Goods purchased from Vishal)
Jan.05 Vishal Dr. 7,000
To Bills Payable A/c 7,000
(Bill drawn by Vishal accepted)
Mar.08 Bills Payable A/c Dr. 7,000
To Bank A/c 7,000
(Amount of Bill Payable paid to bank on maturity)
Page : 311 , Block Name : Numerical Questions
Q4 On Feb 01, 2016, John purchased goods for Rs 15,000 from Jimmi. He immediately made a
payment of Rs 5,000 by cheque and for the balance accepted the bill of exchange drawn upon
him by Jimmi. The bill of exchange was payable after 40 days. Five days before the maturity of
the bill, Jimmi sent the same to his bank for collection. The bank duly presented the bill to John
on the due date who met the bill. The bank informed the same to Jimmi. Prepare John’s account
in the books of Jimmi and Jimmi account in the books of John.
Answer.
Books of Jimmi
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 John Dr. 15,000
To Sales 15,000
Page 19
A/c
(Goods
sold to
John)
Feb.01 Bank A/c Dr. 5,000
To John 5,000
(Cheque
received
for Rs
5,000
from
John)
Bills
Receivab
Feb.01 le A/c Dr. 10,000
To John 10,000
(Bill
received
from
John for
40 days)
Bill Sent
for
Collectio
Mar.10 n A/c Dr. 10,000
To Bills
Receivabl
e A/c 10,000
(John's
acceptan
ce sent
to bank
for
collection
)
(Goods
sold to
John)
Feb.01 Bank A/c Dr. 5,000
To John 5,000
(Cheque
received
for Rs
5,000
from
John)
Bills
Receivab
Feb.01 le A/c Dr. 10,000
To John 10,000
(Bill
received
from
John for
40 days)
Bill Sent
for
Collectio
Mar.10 n A/c Dr. 10,000
To Bills
Receivabl
e A/c 10,000
(John's
acceptan
ce sent
to bank
for
collection
)
Page 20
Mar.15 Bank A/c Dr. 10,000
To Bill
Sent for
Collection
A/c 10,000
(John's
acceptan
ce met
on due
date and
bank
received
the
payment)
Ledger
John's Account
Dr. Cr.
Amount Amou
Date Particulars J.F. Rs Date Particulars J.F. nt Rs
2016 2016
5,
Feb.01 Sales Feb.01 Bank 00
15,000 0
10
Feb.01 Bills Receivable ,0
00
15
,0
15,000 00
Books of John
Journal
To Bill
Sent for
Collection
A/c 10,000
(John's
acceptan
ce met
on due
date and
bank
received
the
payment)
Ledger
John's Account
Dr. Cr.
Amount Amou
Date Particulars J.F. Rs Date Particulars J.F. nt Rs
2016 2016
5,
Feb.01 Sales Feb.01 Bank 00
15,000 0
10
Feb.01 Bills Receivable ,0
00
15
,0
15,000 00
Books of John
Journal
Page 21
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Purchases A/c Dr. 15,000
To Jimmi 15,000
(Goods purchased from Jimmi)
Feb.01 Jimmi Dr. 5,000
To Bank A/c 5,000
(Cheque paid to Jimmi)
Feb.01 Jimmi Dr. 10,000
To Bills Payable A/c 10,000
(Bill drawn by Jimmi accepted for 40 days)
Mar.15 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Payment of bill made on maturity to bank)
Ledger
Jimmi's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Purchases A/c Dr. 15,000
To Jimmi 15,000
(Goods purchased from Jimmi)
Feb.01 Jimmi Dr. 5,000
To Bank A/c 5,000
(Cheque paid to Jimmi)
Feb.01 Jimmi Dr. 10,000
To Bills Payable A/c 10,000
(Bill drawn by Jimmi accepted for 40 days)
Mar.15 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Payment of bill made on maturity to bank)
Ledger
Jimmi's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Page 22
Feb.01 Bank Feb.01 Purchases
5,000 15,000
Feb.01 Bills Payable
10,000
15,000 15,000
Page : 311 , Block Name : Numerical Questions
Q5 On Jan 15, 2015, Kartar Sold goods for Rs 30,000 to Bhagwan and drew upon him three
bills of exchanges of Rs 10,000 each payable after one month, two month, and three months
respectively. The first bill was retained by Kartar till its maturity. The second bill was endorsed by
him in favour of his creditor Ratna and the third bill was discounted by him immediately @ 6%
p.a. All the bills were met by Bhagwan. Journalise the above transactions in the books of Kartar
and Bhagwan. Also prepare ledger accounts in books of Kartar and Bhagwan.
Answer. Journal Entries in the Books of Kartar
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2015
Jan.15 Bhagwan Dr. 30,000
To Sales A/c 30,000
(Goods sold to Bhagwan)
Jan.15 Bills Receivable A/c Dr. 10,000
To Bhagwan 10,000
(Three bills of Rs 10,000 each, received from
Bhagwan–first bill for one month, second bill
for two months and third bill for three months)
Jan.15 Ratna Dr. 10,000
To Bills Receivable A/c 10,000
5,000 15,000
Feb.01 Bills Payable
10,000
15,000 15,000
Page : 311 , Block Name : Numerical Questions
Q5 On Jan 15, 2015, Kartar Sold goods for Rs 30,000 to Bhagwan and drew upon him three
bills of exchanges of Rs 10,000 each payable after one month, two month, and three months
respectively. The first bill was retained by Kartar till its maturity. The second bill was endorsed by
him in favour of his creditor Ratna and the third bill was discounted by him immediately @ 6%
p.a. All the bills were met by Bhagwan. Journalise the above transactions in the books of Kartar
and Bhagwan. Also prepare ledger accounts in books of Kartar and Bhagwan.
Answer. Journal Entries in the Books of Kartar
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2015
Jan.15 Bhagwan Dr. 30,000
To Sales A/c 30,000
(Goods sold to Bhagwan)
Jan.15 Bills Receivable A/c Dr. 10,000
To Bhagwan 10,000
(Three bills of Rs 10,000 each, received from
Bhagwan–first bill for one month, second bill
for two months and third bill for three months)
Jan.15 Ratna Dr. 10,000
To Bills Receivable A/c 10,000
Page 23
(Second bill endorsed to Ratna)
Jan.15 Bank A/c Dr. 9,850
Discount A/c Dr. 150
To Bills Receivable A/c 10,000
(B/R discounted)
Feb.19 Cash A/c Dr. 10,000
To Bills Receivable A/c 10,000
(First bill for one month met by Bhagwan, on due date)
Bhagwan’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Sales A/c 30,000 Jan. Bills Receivable 30,000
15 A/c
30,000 30,000
Ratna’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bills Receivable 10,000 Jan. Balance b/d 10,000
A/c 15
10,000 10,000
Bills Receivable Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bhagwan 30,000 Jan. Ratna 10,000
15
Jan. Bank A/c 9,850
15
Jan.15 Bank A/c Dr. 9,850
Discount A/c Dr. 150
To Bills Receivable A/c 10,000
(B/R discounted)
Feb.19 Cash A/c Dr. 10,000
To Bills Receivable A/c 10,000
(First bill for one month met by Bhagwan, on due date)
Bhagwan’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Sales A/c 30,000 Jan. Bills Receivable 30,000
15 A/c
30,000 30,000
Ratna’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bills Receivable 10,000 Jan. Balance b/d 10,000
A/c 15
10,000 10,000
Bills Receivable Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bhagwan 30,000 Jan. Ratna 10,000
15
Jan. Bank A/c 9,850
15
Page 24
Jan. Discount A/c 150
15
Feb. Cash 10,000
19
30,000 30,000
Cash Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Feb. 19 Bills Receivable 10,000 Feb. Balance c/d 10,000
19
10,000 10,000
Bank’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bills Receivable 9,850 Jan. Balance c/d 9,850
15
9,850 9,850
Journal Entries in the Books of Bhagwan
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2015
Jan.15 Purchases A/c Dr. 30,000
To Kartar 30,000
(Good purchased from Kartar on credit)
Jan.15 Kartar Dr. 30,000
To Bills Payable A/c 30,000
(Three bill Rs 10,000 each drawn by Kartar–
15
Feb. Cash 10,000
19
30,000 30,000
Cash Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Feb. 19 Bills Receivable 10,000 Feb. Balance c/d 10,000
19
10,000 10,000
Bank’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bills Receivable 9,850 Jan. Balance c/d 9,850
15
9,850 9,850
Journal Entries in the Books of Bhagwan
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2015
Jan.15 Purchases A/c Dr. 30,000
To Kartar 30,000
(Good purchased from Kartar on credit)
Jan.15 Kartar Dr. 30,000
To Bills Payable A/c 30,000
(Three bill Rs 10,000 each drawn by Kartar–
Page 25
The first bill for one month, the second bill for two months
and the third bill for three months, accepted and
returned them to Kartar)
Feb.19 Bills Payable A/c Dr. 10,000
To Cash A/c 10,000
(First bill was paid on due date)
Mar.19 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Second bill was paid on due date to Ratna)
Apr.19 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Third bill was paid on due date to bank)
Kartar’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bills Payable A/c 30,000 Jan. Purchases 30,000
15
30,000 30,000
Bills Payable Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
and the third bill for three months, accepted and
returned them to Kartar)
Feb.19 Bills Payable A/c Dr. 10,000
To Cash A/c 10,000
(First bill was paid on due date)
Mar.19 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Second bill was paid on due date to Ratna)
Apr.19 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Third bill was paid on due date to bank)
Kartar’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Jan. 15 Bills Payable A/c 30,000 Jan. Purchases 30,000
15
30,000 30,000
Bills Payable Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Page 26
Feb. 19 Cash A/c 10,000 Jan. Kartar 30,000
15
Mar. 19 Bank A/c 10,000
Apr. 19 Bank A/c 10,000
30,000 30,000
Cash Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Feb. 19 Balance b/d 10,000 Feb. Bills Payable A/c 10,000
19
10,000 10,000
Bank’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Mar. 15 Balance b/d 20,000 Mar. 19 Bills Payable A/c 10,000
Apr. 19 Bills Payable A/c 10,000
20,000 20,000
Page : 311 , Block Name : Numerical Questions
Q6 On Jan. 01, 2016 Arun sold goods for Rs 30,000 to Sunil. 50% of the payment was made
immediately by Sunil on which Arun allowed a cash discount of 2%. For the balance Sunil drew
a promissory note in favour of Arun payable after 20 days. Since, the date of maturity of bill was
a public holiday, Arun presented the bill on a day, as per the provisions of Negotiable Instrument
Act which was met by Sunil. State the date on which the bill was presented by Arun for payment
and Journalise the above transactions in the books of Arun and Sunil.
Answer. Journal Entries in the Books of Arun
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Sunil Dr. 30,000
15
Mar. 19 Bank A/c 10,000
Apr. 19 Bank A/c 10,000
30,000 30,000
Cash Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Feb. 19 Balance b/d 10,000 Feb. Bills Payable A/c 10,000
19
10,000 10,000
Bank’s Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
(Rs) (Rs)
2015 2015
Mar. 15 Balance b/d 20,000 Mar. 19 Bills Payable A/c 10,000
Apr. 19 Bills Payable A/c 10,000
20,000 20,000
Page : 311 , Block Name : Numerical Questions
Q6 On Jan. 01, 2016 Arun sold goods for Rs 30,000 to Sunil. 50% of the payment was made
immediately by Sunil on which Arun allowed a cash discount of 2%. For the balance Sunil drew
a promissory note in favour of Arun payable after 20 days. Since, the date of maturity of bill was
a public holiday, Arun presented the bill on a day, as per the provisions of Negotiable Instrument
Act which was met by Sunil. State the date on which the bill was presented by Arun for payment
and Journalise the above transactions in the books of Arun and Sunil.
Answer. Journal Entries in the Books of Arun
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Sunil Dr. 30,000
Page 27
To Sales A/c 30,000
(Goods sold to Sunil)
Jan.01 Cash A/c Dr. 14,700
Discount Allowed A/c Dr. 300
To Sunil 15,000
(Half of the amount due from Sunil was received and
allowed him 2% Cash Discount)
Jan.01 Bills Receivable A/c Dr. 15,000
To Sunil 15,000
(Promissory note received for 20 days from Sunil
for balance amount due from Sunil)
Jan.23 Cash A/c Dr. 15,000
To Bills Receivable A/c 15,000
(Cash received from Sunil for B/R one day before
maturity, as per negotiable instrument act, if the
date of maturity is holiday, negotiable instrument
will be met one day before maturity)
Note: Date of maturity of the promissory note is Jan. 24, 2016, on account of holiday, it will be
presented one day earlier that is on Jan. 23, 2016.
Journal Entries in the Book of Sunil
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
(Goods sold to Sunil)
Jan.01 Cash A/c Dr. 14,700
Discount Allowed A/c Dr. 300
To Sunil 15,000
(Half of the amount due from Sunil was received and
allowed him 2% Cash Discount)
Jan.01 Bills Receivable A/c Dr. 15,000
To Sunil 15,000
(Promissory note received for 20 days from Sunil
for balance amount due from Sunil)
Jan.23 Cash A/c Dr. 15,000
To Bills Receivable A/c 15,000
(Cash received from Sunil for B/R one day before
maturity, as per negotiable instrument act, if the
date of maturity is holiday, negotiable instrument
will be met one day before maturity)
Note: Date of maturity of the promissory note is Jan. 24, 2016, on account of holiday, it will be
presented one day earlier that is on Jan. 23, 2016.
Journal Entries in the Book of Sunil
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
Page 28
2016
Jan.01 Purchases A/c Dr. 30,000
To Arun 30,000
(Goods purchased from Arun)
Jan.01 Arun Dr. 15,000
To Cash A/c 14,700
To Discount Received A/c 300
(Half amount due to Arun paid by cheque and 2% discount allowed
by him)
Jan.01 Arun Dr. 15,000
To Bills Payable A/c 15,000
(Promissory note issued in favour of Arun for twenty days)
Jan.23 Bills Payable A/c Dr. 15,000
To Cash A/c 15,000
(Promissory note met one day before the maturity day)
Page : 311 , Block Name : Numerical Questions
Q7 Darshan sold goods for Rs 40,000 to Varun on 8.1.2016 and drew upon him a bill of
exchange payable after two months. Varun accepted the bill and returned the same to Darshan.
On the due date the bill was met by Varun. Record the necessary Journal entries in the books of
Darshan and Varun in the following circumstances.
· When the bill was retained by Darshan till the date of its maturity.
· When Darshan immediately discounted the bill @ 6% p.a. with his bank.
· When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
· When three days before its maturity, the bill was sent by Darshan to his bank for collection.
Jan.01 Purchases A/c Dr. 30,000
To Arun 30,000
(Goods purchased from Arun)
Jan.01 Arun Dr. 15,000
To Cash A/c 14,700
To Discount Received A/c 300
(Half amount due to Arun paid by cheque and 2% discount allowed
by him)
Jan.01 Arun Dr. 15,000
To Bills Payable A/c 15,000
(Promissory note issued in favour of Arun for twenty days)
Jan.23 Bills Payable A/c Dr. 15,000
To Cash A/c 15,000
(Promissory note met one day before the maturity day)
Page : 311 , Block Name : Numerical Questions
Q7 Darshan sold goods for Rs 40,000 to Varun on 8.1.2016 and drew upon him a bill of
exchange payable after two months. Varun accepted the bill and returned the same to Darshan.
On the due date the bill was met by Varun. Record the necessary Journal entries in the books of
Darshan and Varun in the following circumstances.
· When the bill was retained by Darshan till the date of its maturity.
· When Darshan immediately discounted the bill @ 6% p.a. with his bank.
· When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
· When three days before its maturity, the bill was sent by Darshan to his bank for collection.
Page 29
Answer. Case (i): When the bill was retained by Darshan till the date of its maturity
Journal Entries in the Books of Darshan
Debit Credit
Particular
L.F. Amount Amount
s
Date Rs Rs
2016
Jan.08 Varun Dr. 40,000
To
Sales
A/c 40,000
(Goods
sold to
Varun)
Bills
Receiva
Jan.08 ble A/c Dr. 40,000
To
Varun 40,000
(Varun's
accepta
nce
receive
d for
two
months)
Cash
Mar.11 A/c Dr. 40,000
To Bills
Receiva
ble A/c 40,000
(Payme
nt for
B/R
receive
d for
Journal Entries in the Books of Darshan
Debit Credit
Particular
L.F. Amount Amount
s
Date Rs Rs
2016
Jan.08 Varun Dr. 40,000
To
Sales
A/c 40,000
(Goods
sold to
Varun)
Bills
Receiva
Jan.08 ble A/c Dr. 40,000
To
Varun 40,000
(Varun's
accepta
nce
receive
d for
two
months)
Cash
Mar.11 A/c Dr. 40,000
To Bills
Receiva
ble A/c 40,000
(Payme
nt for
B/R
receive
d for
Page 30
B/R)
Journal Entries in the Books of Varun
Debit Credit
Date Particulars L.F Amount Amount
Rs Rs
2016
Jan.08 Purchases A/c Dr. 40,000
To Darshan 40,000
(Goods bought from Darshan)
Jan.08 Darshan Dr. 40,000
To Bills Payable A/c 40,000
(Bill of two months accepted for Darshan)
Mar.11 Bills Payable A/c Dr. 40,000
To Cash A/c 40,000
(Varun cleared his acceptance on the due
date)
Case (ii): When Darshan immediately discounted the bill @ 6% p.a. with the bank.
Journal Entries in the Books of Darshan
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.08 Varun Dr. 40,000
Journal Entries in the Books of Varun
Debit Credit
Date Particulars L.F Amount Amount
Rs Rs
2016
Jan.08 Purchases A/c Dr. 40,000
To Darshan 40,000
(Goods bought from Darshan)
Jan.08 Darshan Dr. 40,000
To Bills Payable A/c 40,000
(Bill of two months accepted for Darshan)
Mar.11 Bills Payable A/c Dr. 40,000
To Cash A/c 40,000
(Varun cleared his acceptance on the due
date)
Case (ii): When Darshan immediately discounted the bill @ 6% p.a. with the bank.
Journal Entries in the Books of Darshan
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.08 Varun Dr. 40,000
Page 31
To Sales A/c 40,000
(Goods sold to Varun)
Jan.08 Bills Receivable A/c Dr. 40,000
To Varun 40,000
(B/R received from Varun for two months)
Jan.08 Bank A/c Dr. 39,600
Discount A/c Dr. 400
To Bills Receivable A/c 40,000
(B/R discounted from bank @ 6 p.a.)
Journal Entries in the Books of Varun
Debit
Particu Amou
Date lars L.F. nt Rs Credit Amount Rs
2016
Purc
hase 40,0
Jan.08 s A/c Dr. 00
To
Darsh
an 40,000
(Goo
ds
boug
ht
from
Dars
han)
Jan.08 Dars Dr. 40,0
(Goods sold to Varun)
Jan.08 Bills Receivable A/c Dr. 40,000
To Varun 40,000
(B/R received from Varun for two months)
Jan.08 Bank A/c Dr. 39,600
Discount A/c Dr. 400
To Bills Receivable A/c 40,000
(B/R discounted from bank @ 6 p.a.)
Journal Entries in the Books of Varun
Debit
Particu Amou
Date lars L.F. nt Rs Credit Amount Rs
2016
Purc
hase 40,0
Jan.08 s A/c Dr. 00
To
Darsh
an 40,000
(Goo
ds
boug
ht
from
Dars
han)
Jan.08 Dars Dr. 40,0
Page 32
han 00
To
Bills
Payabl
e A/c 40,000
(Bill
of
two
mont
hs
acce
pted
for
Dars
han)
Bills
Paya
ble 40,0
Mar.11 A/c Dr. 00
To
Bank
A/c 40,000
(Varu
n
clear
ed
his
acce
ptanc
e on
the
due
date)
Case (iii): When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
Journal Entries in the Books of Darshan
Date Particulars L.F. Debit Credit
Amount Amount
To
Bills
Payabl
e A/c 40,000
(Bill
of
two
mont
hs
acce
pted
for
Dars
han)
Bills
Paya
ble 40,0
Mar.11 A/c Dr. 00
To
Bank
A/c 40,000
(Varu
n
clear
ed
his
acce
ptanc
e on
the
due
date)
Case (iii): When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
Journal Entries in the Books of Darshan
Date Particulars L.F. Debit Credit
Amount Amount
Page 33
Rs Rs
2016
Jan.08 Varun Dr. 40,000
To Sales A/c 40,000
(Goods sold to Varun)
Jan.08 Bills Receivable A/c Dr. 40,000
To Varun A/c 40,000
(Varun's acceptance received for two months)
Jan.08 Suresh A/c Dr. 40,000
To Bills Receivable A/c 40,000
(Varun's acceptance endorsed in favour of Suresh)
Journal Entries in the Books of Varun
Credit
Debit Amount
Date Particulars L.F Amount Rs Rs
2016
Jan.08 Purchases A/c Dr. 40,000
To Darshan 40,000
(Goods bought from Darshan)
Jan.08 Darshan Dr. 40,000
To Bills Payable A/c 40,000
(Bill drawn by Darshan accepted for two months)
2016
Jan.08 Varun Dr. 40,000
To Sales A/c 40,000
(Goods sold to Varun)
Jan.08 Bills Receivable A/c Dr. 40,000
To Varun A/c 40,000
(Varun's acceptance received for two months)
Jan.08 Suresh A/c Dr. 40,000
To Bills Receivable A/c 40,000
(Varun's acceptance endorsed in favour of Suresh)
Journal Entries in the Books of Varun
Credit
Debit Amount
Date Particulars L.F Amount Rs Rs
2016
Jan.08 Purchases A/c Dr. 40,000
To Darshan 40,000
(Goods bought from Darshan)
Jan.08 Darshan Dr. 40,000
To Bills Payable A/c 40,000
(Bill drawn by Darshan accepted for two months)
Page 34
Mar.11 Bills Payable A/c Dr. 40,000
To Cash A/c 40,000
(Bill paid to the holder of bill)
Case (iv): When three days before its maturity, the bill, as sent by Darshan to his bank for
Collection.
Journal Entries in the Books of Darshan
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.08 Varun A/c Dr. 40,000
To Sales A/c 40,000
(Goods sold to Varun)
Jan.08 Bills Receivable A/c Dr. 40,000
To Varun A/c 40,000
(Varun's acceptance received for two
months)
Mar.08 Bill Sent for Collection A/c Dr. 40,000
To Bills Receivable A/c 40,000
(Bill sent for collection sent to the bank)
Mar.11 Bank A/c Dr. 40,000
To Bill Sent for Collection 40,000
(Bill amount was met)
To Cash A/c 40,000
(Bill paid to the holder of bill)
Case (iv): When three days before its maturity, the bill, as sent by Darshan to his bank for
Collection.
Journal Entries in the Books of Darshan
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.08 Varun A/c Dr. 40,000
To Sales A/c 40,000
(Goods sold to Varun)
Jan.08 Bills Receivable A/c Dr. 40,000
To Varun A/c 40,000
(Varun's acceptance received for two
months)
Mar.08 Bill Sent for Collection A/c Dr. 40,000
To Bills Receivable A/c 40,000
(Bill sent for collection sent to the bank)
Mar.11 Bank A/c Dr. 40,000
To Bill Sent for Collection 40,000
(Bill amount was met)
Page 35
Journal Entries in the Books of Varun
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.08 Purchases A/c Dr. 40,000
To Darshan 40,000
(Goods bought from Darshan)
Jan.08 Darshan Dr. 40,000
To Bills Payable A/c 40,000
(Bill drawn by Darshan accepted for two
months)
Mar.11 Bills Payable A/c Dr. 40,000
To Bank A/c 40,000
(Bill paid to the bank)
Page No : 311-312 , Block Name : Numerical Questions
Q8 Bansal Traders allow a trade discount of 10% on the list price of the goods purchased from
them. Mohan traders, who runs a retail shop made the following purchases from Bansal Traders
Date Amount
Rs
Dec.21, 2016 1,000
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.08 Purchases A/c Dr. 40,000
To Darshan 40,000
(Goods bought from Darshan)
Jan.08 Darshan Dr. 40,000
To Bills Payable A/c 40,000
(Bill drawn by Darshan accepted for two
months)
Mar.11 Bills Payable A/c Dr. 40,000
To Bank A/c 40,000
(Bill paid to the bank)
Page No : 311-312 , Block Name : Numerical Questions
Q8 Bansal Traders allow a trade discount of 10% on the list price of the goods purchased from
them. Mohan traders, who runs a retail shop made the following purchases from Bansal Traders
Date Amount
Rs
Dec.21, 2016 1,000
Page 36
Dec.26, 2016 1,200
Dec.18, 2016 2,000
Dec.31, 2016 5,000
For all the purchases Mohan Traders drew promissory note in favour of Bansal Traders payable
after 30 days. The promissory note for the sale of Dec. 21, 2016 was retained by Bansal
Traders with them till the date of its maturity. The promissory note drawn on 26.12.2016 was
discounted by Bansal Traders from their bank at 12% p.a. The promissory note drawn on Dec.
28, 2016 was endorsed by Bansal Traders in favour of their creditor Dream Soaps in full
settlement of a purchase amounting to Rs 1,900. On 25.1.2017 Bansal Traders sent the
promissory note drawn on Dec. 31, 2016 to their bank for collection. All the promissory notes
were met by Mohan Trade Rs Record the necessary journal entries for the above transactions in
the books of Bansal Traders and Mohan Traders and prepare Mohan Traders account in the
books of Bansal Traders and Bansal Traders account in the books of Mohan Trade Rs
Answer. Journal Entries in the Books of Bansal Traders
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2016
Mohan
Dec.21 Traders Dr. 900
To Sales
A/c 900
(Goods
sold to
Mohan
Traders
list price
Rs
1,000 at
10% trade
discount)
2016
Bills
Receivabl
Dec.21 e A/c Dr. 900
To Mohan
Traders 900
(Promisso
Dec.18, 2016 2,000
Dec.31, 2016 5,000
For all the purchases Mohan Traders drew promissory note in favour of Bansal Traders payable
after 30 days. The promissory note for the sale of Dec. 21, 2016 was retained by Bansal
Traders with them till the date of its maturity. The promissory note drawn on 26.12.2016 was
discounted by Bansal Traders from their bank at 12% p.a. The promissory note drawn on Dec.
28, 2016 was endorsed by Bansal Traders in favour of their creditor Dream Soaps in full
settlement of a purchase amounting to Rs 1,900. On 25.1.2017 Bansal Traders sent the
promissory note drawn on Dec. 31, 2016 to their bank for collection. All the promissory notes
were met by Mohan Trade Rs Record the necessary journal entries for the above transactions in
the books of Bansal Traders and Mohan Traders and prepare Mohan Traders account in the
books of Bansal Traders and Bansal Traders account in the books of Mohan Trade Rs
Answer. Journal Entries in the Books of Bansal Traders
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2016
Mohan
Dec.21 Traders Dr. 900
To Sales
A/c 900
(Goods
sold to
Mohan
Traders
list price
Rs
1,000 at
10% trade
discount)
2016
Bills
Receivabl
Dec.21 e A/c Dr. 900
To Mohan
Traders 900
(Promisso
Page 37
ry note
received
from
Mohan
Traders
payable
after 30
days)
2016
Mohan
Dec.26 Traders Dr. 1,080
To Sales
A/c 1,080
(Goods
sold to
Mohan
Traders
list price
Rs
1,200 at
10% trade
discount)
2016
Bills
Receivabl
Dec.26 e A/c Dr. 1,080
To Mohan
Traders 1,080
(Promisso
ry note
received
from
Mohan
Traders)
2016
received
from
Mohan
Traders
payable
after 30
days)
2016
Mohan
Dec.26 Traders Dr. 1,080
To Sales
A/c 1,080
(Goods
sold to
Mohan
Traders
list price
Rs
1,200 at
10% trade
discount)
2016
Bills
Receivabl
Dec.26 e A/c Dr. 1,080
To Mohan
Traders 1,080
(Promisso
ry note
received
from
Mohan
Traders)
2016
Page 38
Dec.26 Bank A/c Dr. 1,071
Discount
A/c Dr. 9
To Bills
Receivabl
e A/c 1,080
(Promisso
ry note
discounte
d from the
Bank)
2016
Mohan
Traders
Dec.28 A/c Dr. 1,800
To Sales
A/c 1,800
(Goods
sold to
Mohan
Traders
list price
Rs
2,000 at
10% trade
discount)
2016
Bills
Receivabl
Dec.28 e A/c Dr. 1,800
To Mohan
Traders
A/c 1,800
(Promisso
ry note
received
Discount
A/c Dr. 9
To Bills
Receivabl
e A/c 1,080
(Promisso
ry note
discounte
d from the
Bank)
2016
Mohan
Traders
Dec.28 A/c Dr. 1,800
To Sales
A/c 1,800
(Goods
sold to
Mohan
Traders
list price
Rs
2,000 at
10% trade
discount)
2016
Bills
Receivabl
Dec.28 e A/c Dr. 1,800
To Mohan
Traders
A/c 1,800
(Promisso
ry note
received
Page 39
from
Mohan
Traders)
2016
Dream
Dec.28 Soaps A/c Dr. 1,900
To Bills
Receivabl
e A/c 1,800
To
Discount
Received
A/c 100
(Promisso
ry note of
Rs 1,800
sent to
Dream
Soap in
full
settlemen
t of
amount
due to
him)
2016
Mohan
Dec.31 Traders Dr. 4,500
To Sales
A/c 4,500
(Goods
sold to
Mohan
trades list
price Rs
5,000 at
10% trade
Mohan
Traders)
2016
Dream
Dec.28 Soaps A/c Dr. 1,900
To Bills
Receivabl
e A/c 1,800
To
Discount
Received
A/c 100
(Promisso
ry note of
Rs 1,800
sent to
Dream
Soap in
full
settlemen
t of
amount
due to
him)
2016
Mohan
Dec.31 Traders Dr. 4,500
To Sales
A/c 4,500
(Goods
sold to
Mohan
trades list
price Rs
5,000 at
10% trade
Page 40
discount)
2016
Bills
Receivabl
Dec.31 e A/c Dr. 4,500
To Mohan
Traders 4,500
(Promisso
ry note
received
from
Mohan
Traders
for 30
days)
2017
Jan.23 Cash A/c Dr. 900
To Bills
Receivabl
e A/c 900
(Promisso
ry note
issued on
Dec. 21,
2005 was
met on
maturity)
2017
Bill Sent
for
collection
Jan.25 A/c Dr. 4,500
To Bills 4,500
Receivabl
2016
Bills
Receivabl
Dec.31 e A/c Dr. 4,500
To Mohan
Traders 4,500
(Promisso
ry note
received
from
Mohan
Traders
for 30
days)
2017
Jan.23 Cash A/c Dr. 900
To Bills
Receivabl
e A/c 900
(Promisso
ry note
issued on
Dec. 21,
2005 was
met on
maturity)
2017
Bill Sent
for
collection
Jan.25 A/c Dr. 4,500
To Bills 4,500
Receivabl
Page 41
e A/c
(Promisso
ry note
issued on
Dec. 31,
2005
sent for
collection
to bank)
2017
Feb.02 Bank A/c Dr. 4,500
To Bill
Sent for
Collection
A/c 4,500
(Bank got
payment
of bill sent
for
collection
on due
date)
In the books of Bansal Traders
Mohan Trader's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Dec.21 Sales 900 Dec.21 Bills Receivable 900
Dec.26 Sales 1,080 Dec.26 Bills Receivable 1,080
Dec.28 Sales 1,800 Dec.28 Bills Receivable 1,800
(Promisso
ry note
issued on
Dec. 31,
2005
sent for
collection
to bank)
2017
Feb.02 Bank A/c Dr. 4,500
To Bill
Sent for
Collection
A/c 4,500
(Bank got
payment
of bill sent
for
collection
on due
date)
In the books of Bansal Traders
Mohan Trader's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Dec.21 Sales 900 Dec.21 Bills Receivable 900
Dec.26 Sales 1,080 Dec.26 Bills Receivable 1,080
Dec.28 Sales 1,800 Dec.28 Bills Receivable 1,800
Page 42
Dec.31 Sales 4,500 Dec.31 Bills Receivable 4,500
8,280 8,280
Journal
Entries
in the
Books
of
Mohan
Trader’
s
Debit
Particul
Date L.F. Amount Credit Amount Rs
ars
Rs
2016
Purch
ases
Dec.21 A/c Dr. 900
To
Bansa
l
Trader
s 900
(Good
s
bough
t from
Bansa
l
Trader
's list
price
Rs
1,000
at
10%
trade
discou
nt)
8,280 8,280
Journal
Entries
in the
Books
of
Mohan
Trader’
s
Debit
Particul
Date L.F. Amount Credit Amount Rs
ars
Rs
2016
Purch
ases
Dec.21 A/c Dr. 900
To
Bansa
l
Trader
s 900
(Good
s
bough
t from
Bansa
l
Trader
's list
price
Rs
1,000
at
10%
trade
discou
nt)
Page 43
2016
Bansa
l Trad
Dec.21 er Dr. 900
To
Bills
Payab
le A/c 900
(Promi
ssory
note
issued
Bansa
l
Trader
s for
Rs
900)
2016
Purch
ases
Dec.26 A/c Dr. 1,080
To
Bansa
l
Trader
s 1,080
(Good
s
bough
t from
Bansa
l
Trader
s list
price
Rs
1,200
at
10%
Bansa
l Trad
Dec.21 er Dr. 900
To
Bills
Payab
le A/c 900
(Promi
ssory
note
issued
Bansa
l
Trader
s for
Rs
900)
2016
Purch
ases
Dec.26 A/c Dr. 1,080
To
Bansa
l
Trader
s 1,080
(Good
s
bough
t from
Bansa
l
Trader
s list
price
Rs
1,200
at
10%
Page 44
Trade
discou
nt)
2016
Bansa
l Trad
Dec.26 ers Dr. 1,080
To
Bills
Payab
le A/c 1,080
(Promi
ssory
note
receiv
ed
from
Bansa
l
Trader
s)
2016
Purch
ases
Dec.28 A/c Dr. 1,800
To
Bansa
l
Trader
s 1,800
(Good
s
bough
t from
Bansa
l
Trader
s list
price
discou
nt)
2016
Bansa
l Trad
Dec.26 ers Dr. 1,080
To
Bills
Payab
le A/c 1,080
(Promi
ssory
note
receiv
ed
from
Bansa
l
Trader
s)
2016
Purch
ases
Dec.28 A/c Dr. 1,800
To
Bansa
l
Trader
s 1,800
(Good
s
bough
t from
Bansa
l
Trader
s list
price
Page 45
Rs
2,000
at
10%
trade
discou
nt)
2016
Bansa
l Trad
Dec.28 ers Dr. 1,800
To
Bills
Payab
le A/c 1,800
(Promi
ssory
note
issued
to
Bansa
l
Trader
s)
2016
Purch
ases
Dec.31 A/c Dr. 4,500
To
Bansa
l
Trader
s 4,500
(Good
s
bough
t from
Bansa
l
2,000
at
10%
trade
discou
nt)
2016
Bansa
l Trad
Dec.28 ers Dr. 1,800
To
Bills
Payab
le A/c 1,800
(Promi
ssory
note
issued
to
Bansa
l
Trader
s)
2016
Purch
ases
Dec.31 A/c Dr. 4,500
To
Bansa
l
Trader
s 4,500
(Good
s
bough
t from
Bansa
l
Page 46
Trader
s of
list
price
Rs
5,000
at
10%
trade
discou
nt)
2016
Bansa
l Trad
Dec.31 ers Dr. 4,500
To
Bills
Payab
le A/c 4,500
(Promi
ssory
note
issued
to
Bansa
l
Trader
s)
2017
Bills
Payab
Jan.23 le A/c Dr. 900
To
Cash
A/c 900
(The
first
promi
ssory
s of
list
price
Rs
5,000
at
10%
trade
discou
nt)
2016
Bansa
l Trad
Dec.31 ers Dr. 4,500
To
Bills
Payab
le A/c 4,500
(Promi
ssory
note
issued
to
Bansa
l
Trader
s)
2017
Bills
Payab
Jan.23 le A/c Dr. 900
To
Cash
A/c 900
(The
first
promi
ssory
Page 47
note
discha
rged
on its
due
date)
2017
Bills
Payab
Jan.28 le A/c Dr. 1,080
To
Bank
A/c 1,080
(The
secon
d
promi
ssory
note
discha
rged
on its
due
date)
2017
Bills
Payab
Jan.30 le A/c Dr. 1,800
To
Cash
A/c 1,800
(The
third
promi
ssory
discha
rged
by
paying
discha
rged
on its
due
date)
2017
Bills
Payab
Jan.28 le A/c Dr. 1,080
To
Bank
A/c 1,080
(The
secon
d
promi
ssory
note
discha
rged
on its
due
date)
2017
Bills
Payab
Jan.30 le A/c Dr. 1,800
To
Cash
A/c 1,800
(The
third
promi
ssory
discha
rged
by
paying
Page 48
Rs
1,800
to
Drea
m
Soaps
)
2017
Bills
Payab
Feb.02 le A/c Dr. 4,500
To
Bank
A/c 4,500
(The
fourth
promi
ssory
note
discha
rged
by
paid
Rs
4,500
to
Bank)
In the books of Mohan Traders
BansalTrader's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Dec.21 Bills Payable 900 Dec.21 Purchases 900
Dec.26 Bills Payable 1,080 Dec.26 Purchases 1,080
1,800
to
Drea
m
Soaps
)
2017
Bills
Payab
Feb.02 le A/c Dr. 4,500
To
Bank
A/c 4,500
(The
fourth
promi
ssory
note
discha
rged
by
paid
Rs
4,500
to
Bank)
In the books of Mohan Traders
BansalTrader's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Dec.21 Bills Payable 900 Dec.21 Purchases 900
Dec.26 Bills Payable 1,080 Dec.26 Purchases 1,080
Page 49
Dec.28 Bills Payable 1,800 Dec.28 Purchases 1,800
Dec.31 Bills Payable 4,500 Dec.31 Purchases 4,500
8,280 8,280
Page : 312 , Block Name : Numerical Questions
Q9 Narayanan purchased goods for Rs 25,000 from Ravinderan on Feb. 01, 2016. Ravinderan
drew upon Narayanan a bill of exchange for the same amount payable after 30 days. On the
due date Narayanan dishonoured his acceptance. Pass the necessary journal entries in the
books of Ravinderan and Narayanan in following cases:
When the bill was retained by Ravinderan with him till the date of its maturity.
When the bill was discounted by Ravinderan immediately with his bank @ 6% p.a.
When the bill was endorsed to his creditor Ganeshan.
When the bill was sent by Ravinderan to his bank for collection a few days before it maturity.
Answer. Case (i) : When the bill was retained by Ravinderan with him till the date of its maturity
Books of Ravinderan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
Dec.31 Bills Payable 4,500 Dec.31 Purchases 4,500
8,280 8,280
Page : 312 , Block Name : Numerical Questions
Q9 Narayanan purchased goods for Rs 25,000 from Ravinderan on Feb. 01, 2016. Ravinderan
drew upon Narayanan a bill of exchange for the same amount payable after 30 days. On the
due date Narayanan dishonoured his acceptance. Pass the necessary journal entries in the
books of Ravinderan and Narayanan in following cases:
When the bill was retained by Ravinderan with him till the date of its maturity.
When the bill was discounted by Ravinderan immediately with his bank @ 6% p.a.
When the bill was endorsed to his creditor Ganeshan.
When the bill was sent by Ravinderan to his bank for collection a few days before it maturity.
Answer. Case (i) : When the bill was retained by Ravinderan with him till the date of its maturity
Books of Ravinderan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
Page 50
(Narayanan's acceptance received for 30
days)
Mar.05 Narayanan Dr. 25,000
To Bills Receivable A/c 25,000
(Narayanan failed to meet his
acceptance and bill dishonoured)
Books of Narayanan
Journal
Debit
Particular
Date L.F. Amount Credit Amount Rs
s
Rs
2016
Purchas
Feb.01 es A/c Dr. 25,000
To
Ravinder
an 25,000
(Goods
bought
from
Ravinde
ran)
Ravinde
Feb.01 ran Dr. 25,000
To Bills
Payable
A/c 25,000
(Ravind
eran’s
bill
accepte
days)
Mar.05 Narayanan Dr. 25,000
To Bills Receivable A/c 25,000
(Narayanan failed to meet his
acceptance and bill dishonoured)
Books of Narayanan
Journal
Debit
Particular
Date L.F. Amount Credit Amount Rs
s
Rs
2016
Purchas
Feb.01 es A/c Dr. 25,000
To
Ravinder
an 25,000
(Goods
bought
from
Ravinde
ran)
Ravinde
Feb.01 ran Dr. 25,000
To Bills
Payable
A/c 25,000
(Ravind
eran’s
bill
accepte
Page 51
d)
Bills
Payable
Mar.05 A/c Dr. 25,000
To
Ravinder
an A/c 25,000
(Bill
dishono
ured on
maturity
)
Case (ii) : When the bill was discounted by Ravinderan immediately with his bank @ 6% p.a.
Books of Ravinderan
Journal
Credit
Debit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
(Narayanan's acceptance received)
Feb.01 Bank A/c Dr. 24,875
Bills
Payable
Mar.05 A/c Dr. 25,000
To
Ravinder
an A/c 25,000
(Bill
dishono
ured on
maturity
)
Case (ii) : When the bill was discounted by Ravinderan immediately with his bank @ 6% p.a.
Books of Ravinderan
Journal
Credit
Debit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
(Narayanan's acceptance received)
Feb.01 Bank A/c Dr. 24,875
Page 52
Discount A/c Dr. 125
To Bills Receivable A/c 25,000
(Narayanan's acceptance got discounted with
bank @ 6% p.a.)
Mar.05 Narayanan 25,000
To Bank A/c 25,000
(Narayanan's acceptance dishonoured)
Books of Narayanan
Journal
Debit
Date Particulars L.F. Amount Credit Amount Rs
Rs
2016
Purchase
Feb.01 s A/c Dr. 25,000
To
Ravindera
n 25,000
(Goods
bought
from
Raivnder
an)
Ravinder
Feb.01 an Dr. 25,000
To Bills
Payable
A/c 25,000
(Ravinde
ran’s bill
To Bills Receivable A/c 25,000
(Narayanan's acceptance got discounted with
bank @ 6% p.a.)
Mar.05 Narayanan 25,000
To Bank A/c 25,000
(Narayanan's acceptance dishonoured)
Books of Narayanan
Journal
Debit
Date Particulars L.F. Amount Credit Amount Rs
Rs
2016
Purchase
Feb.01 s A/c Dr. 25,000
To
Ravindera
n 25,000
(Goods
bought
from
Raivnder
an)
Ravinder
Feb.01 an Dr. 25,000
To Bills
Payable
A/c 25,000
(Ravinde
ran’s bill
Page 53
accepted
)
Bills
Payable
Mar.05 A/c Dr. 25,000
To
Ravindera
n 25,000
(Bill
dishonou
red on
maturity)
Case (iii) : When the bill was endorsed to his creditor Ganeshan
Books of Ravinderan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
(Narayanan's acceptance received)
Feb.01 Ganeshan Dr. 25,000
)
Bills
Payable
Mar.05 A/c Dr. 25,000
To
Ravindera
n 25,000
(Bill
dishonou
red on
maturity)
Case (iii) : When the bill was endorsed to his creditor Ganeshan
Books of Ravinderan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
(Narayanan's acceptance received)
Feb.01 Ganeshan Dr. 25,000
Page 54
To Bills Receivable A/c 25,000
(Narayanan's acceptance endorsed in favour
of Ganeshan)
Mar.05 Narayanan Dr.
To Ganeshan A/c 25,000
(Narayanan's acceptance dishonoured)
Books of Narayanan
Journal
Debit Credit
Date L.F.
Particulars Amount Rs Amount Rs
2016
Feb.01 Purchases A/c Dr. 25,000
To Ravinderan 25,000
(Goods bought from Ravinderan)
Feb.01 Ravinderan Dr. 25,000
To Bills Payable A/c 25,000
(Ravinderan’s bill accepted)
Mar.05 Bills Payable A/c Dr. 25,000
To Ravinderan 25,000
(Ravinderan’s bill dishonoured on due date)
Case (iv) : When the bill was sent by Ravinderan to his bank for collection a few days before it
maturity
(Narayanan's acceptance endorsed in favour
of Ganeshan)
Mar.05 Narayanan Dr.
To Ganeshan A/c 25,000
(Narayanan's acceptance dishonoured)
Books of Narayanan
Journal
Debit Credit
Date L.F.
Particulars Amount Rs Amount Rs
2016
Feb.01 Purchases A/c Dr. 25,000
To Ravinderan 25,000
(Goods bought from Ravinderan)
Feb.01 Ravinderan Dr. 25,000
To Bills Payable A/c 25,000
(Ravinderan’s bill accepted)
Mar.05 Bills Payable A/c Dr. 25,000
To Ravinderan 25,000
(Ravinderan’s bill dishonoured on due date)
Case (iv) : When the bill was sent by Ravinderan to his bank for collection a few days before it
maturity
Page 55
Books of Ravinderan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
(Narayanan's acceptance received)
Feb.01 Bill Sent for Collection A/c Dr. 25,000
To Bills Receivable A/c 25,000
(Bill sent to bank for collection)
Mar.05 Narayanan Dr. 25,000
To Bill Sent for Collection A/c 25,000
(Bill got dishonoured)
Books of Narayanan
Journal
Debit
Particular
Date L.F. Amount Credit Amount Rs
s
Rs
2016
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.01 Narayanan Dr. 25,000
To Sales A/c 25,000
(Goods sold to Narayanan)
Feb.01 Bills Receivable A/c Dr. 25,000
To Narayanan 25,000
(Narayanan's acceptance received)
Feb.01 Bill Sent for Collection A/c Dr. 25,000
To Bills Receivable A/c 25,000
(Bill sent to bank for collection)
Mar.05 Narayanan Dr. 25,000
To Bill Sent for Collection A/c 25,000
(Bill got dishonoured)
Books of Narayanan
Journal
Debit
Particular
Date L.F. Amount Credit Amount Rs
s
Rs
2016
Page 56
Purchas
Feb.01 es A/c Dr. 25,000
To
Ravindera
n 25,000
(Bought
goods
from
Ravinde
ran)
Ravinde
Feb.01 ran Dr. 25,000
To Bills
Payable
A/c 25,000
(Ravind
eran’s
bill
accepte
d)
Bills
Payable
Mar.05 A/c Dr. 25,000
To
Ravindera
n 25,000
(Ravind
eran’s
bill
dishono
ured)
Page : 312 , Block Name : Numerical Questions
Feb.01 es A/c Dr. 25,000
To
Ravindera
n 25,000
(Bought
goods
from
Ravinde
ran)
Ravinde
Feb.01 ran Dr. 25,000
To Bills
Payable
A/c 25,000
(Ravind
eran’s
bill
accepte
d)
Bills
Payable
Mar.05 A/c Dr. 25,000
To
Ravindera
n 25,000
(Ravind
eran’s
bill
dishono
ured)
Page : 312 , Block Name : Numerical Questions
Page 57
Q10 Ravi sold goods for Rs 40,000 to Sudershan on Feb 13, 2016. He drew four bills of
exchange upon Sudershan. The first bill was for Rs 5,000 payable after one month. The second
bill was for Rs 10,000 payable after 40 days; the third bill was for Rs 12,000 payable after three
months and fourth bill was for the balance amount payable after 19 days. Sudershan accepted
all the bills and returned the same to Ravi. Ravi discounted the first bill with his bank at 6% p.a.
He endorsed the second bill to his creditor Mustaq for the full settlement of a debt of Rs 10,200.
The third bill was kept by Ravi with him till the date of maturity. Five days before the maturity of
the fourth bill, Ravi sent the bill to his bank for collection. All the four bills were dishounoured by
Sudarshan on maturity. Sudershan settled Ravi’s claim in cash three days after the dishonour of
each bill along with interest @ 12% p.a. for the terms of the bills. You are requested to record
the necessary journal entries in the books to Ravi, Sudershan, Mustaq and bank for the above
transaction. Also prepare Sudershan’s account and Mustaq’s account in the books of Ravi.
Answer. Books of Ravi
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.13 Sudershan Dr. 40,000
To Sales A/c 40,000
(Goods sold to Sudershan)
Feb.13 Bills Receivable A/c Dr. 40,000
To Sudershan 40,000
(Four bills from Sudershan received: the first for Rs
5,000, the second bill for Rs 10,000, the third bill for
Rs 12,000 and the fourth bill for Rs 13)
Feb.13 Bank A/c Dr. 4,975
Discount A/c Dr. 25
To Bills Receivable A/c 5,000
(The first bill discounted with bank at 6% p.a.)
exchange upon Sudershan. The first bill was for Rs 5,000 payable after one month. The second
bill was for Rs 10,000 payable after 40 days; the third bill was for Rs 12,000 payable after three
months and fourth bill was for the balance amount payable after 19 days. Sudershan accepted
all the bills and returned the same to Ravi. Ravi discounted the first bill with his bank at 6% p.a.
He endorsed the second bill to his creditor Mustaq for the full settlement of a debt of Rs 10,200.
The third bill was kept by Ravi with him till the date of maturity. Five days before the maturity of
the fourth bill, Ravi sent the bill to his bank for collection. All the four bills were dishounoured by
Sudarshan on maturity. Sudershan settled Ravi’s claim in cash three days after the dishonour of
each bill along with interest @ 12% p.a. for the terms of the bills. You are requested to record
the necessary journal entries in the books to Ravi, Sudershan, Mustaq and bank for the above
transaction. Also prepare Sudershan’s account and Mustaq’s account in the books of Ravi.
Answer. Books of Ravi
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.13 Sudershan Dr. 40,000
To Sales A/c 40,000
(Goods sold to Sudershan)
Feb.13 Bills Receivable A/c Dr. 40,000
To Sudershan 40,000
(Four bills from Sudershan received: the first for Rs
5,000, the second bill for Rs 10,000, the third bill for
Rs 12,000 and the fourth bill for Rs 13)
Feb.13 Bank A/c Dr. 4,975
Discount A/c Dr. 25
To Bills Receivable A/c 5,000
(The first bill discounted with bank at 6% p.a.)
Page 58
Feb.13 Mustaq Dr. 10,200
To Bills Receivable A/c 10,000
To Discount Received A/c 200
(The second bill endorsed to Mustaq in full settlement
of amount due to him)
Mar.03 Bill Sent for Collection A/c Dr. 13,000
To Bills Receivable A/c 13,000
(The fourth bill sent to bank for collection)
Mar.07 Sudershan Dr. 13,000
To Bill Sent for Collection A/c 13,000
(The fourth bill dishonoured on due date)
Mar.07 Sudershan Dr. 81
To Interest A/c 81
(Interest due on the fourth bill Rs 13,000 for 19
days at 12% p.a,)
Mar.10 Cash A/c Dr. 13,081
To Sudershan 13,081
(Cash received from Sudershan)
Mar.16 Sudershan Dr. 5,000
To Bank A/c 5,000
(The first bill dishonoured)
To Bills Receivable A/c 10,000
To Discount Received A/c 200
(The second bill endorsed to Mustaq in full settlement
of amount due to him)
Mar.03 Bill Sent for Collection A/c Dr. 13,000
To Bills Receivable A/c 13,000
(The fourth bill sent to bank for collection)
Mar.07 Sudershan Dr. 13,000
To Bill Sent for Collection A/c 13,000
(The fourth bill dishonoured on due date)
Mar.07 Sudershan Dr. 81
To Interest A/c 81
(Interest due on the fourth bill Rs 13,000 for 19
days at 12% p.a,)
Mar.10 Cash A/c Dr. 13,081
To Sudershan 13,081
(Cash received from Sudershan)
Mar.16 Sudershan Dr. 5,000
To Bank A/c 5,000
(The first bill dishonoured)
Page 59
Mar.16 Sudershan Dr. 50
To Interest A/c 50
(Interest due on amount Rs 5,000 at 12%
for one month)
Mar.19 Cash A/c Dr. 5,050
To Sudershan A/c 5,050
(Sudershan paid the amount due on account
dishonoured of the first bill plus interest)
Mar.28 Sudershan Dr. 10,000
Discount Received A/c Dr. 200
To Mustaq 10,200
(The second bill dishonoured, which had endorsed
in favour of Mustaq)
Mar.28 Sudershan Dr. 132
To Interest A/c 132
(Interest charged at 12% on the amount due on account
of dishonour of the second bill Rs 10,000)
Apr.01 Cash A/c Dr. 10,132
To Sudershan A/c 10,132
(Received cash from Sudershan for the second bill
along with interest)
May16 Sudershan Dr. 12,000
To Interest A/c 50
(Interest due on amount Rs 5,000 at 12%
for one month)
Mar.19 Cash A/c Dr. 5,050
To Sudershan A/c 5,050
(Sudershan paid the amount due on account
dishonoured of the first bill plus interest)
Mar.28 Sudershan Dr. 10,000
Discount Received A/c Dr. 200
To Mustaq 10,200
(The second bill dishonoured, which had endorsed
in favour of Mustaq)
Mar.28 Sudershan Dr. 132
To Interest A/c 132
(Interest charged at 12% on the amount due on account
of dishonour of the second bill Rs 10,000)
Apr.01 Cash A/c Dr. 10,132
To Sudershan A/c 10,132
(Received cash from Sudershan for the second bill
along with interest)
May16 Sudershan Dr. 12,000
Page 60
To Bills Receivable A/c 12,000
(The third bill dishonoured on due date)
May16 Sudershan Dr. 360
To Interest A/c 360
(Interest at 12% for 3 months charged on the amount due
on account of dishounor the third bill Rs 12,000)
May19 Cash A/c Dr. 12,360
To Sudershan 12,360
(Cash received from Sudershan for the third bill along with interest 12%
p.a.)
Ledger
Sundershan'sAccount
Dr. Cr.
Partic Amou Partic
Date ulars J.F. nt Rs Date ulars J.F. Amount Rs
2016 2016
Bills
Rece
Feb.1 Sale 40,0 Feb.1 ivabl
3 s 00 3 e 40,000
Bill
sent
for
Mar.0 Colle 13,0 Mar.1
7 ction 00 0 Cash 13,081
Mar.0 Inter Mar.1
7 est 81 9 Cash 5,050
(The third bill dishonoured on due date)
May16 Sudershan Dr. 360
To Interest A/c 360
(Interest at 12% for 3 months charged on the amount due
on account of dishounor the third bill Rs 12,000)
May19 Cash A/c Dr. 12,360
To Sudershan 12,360
(Cash received from Sudershan for the third bill along with interest 12%
p.a.)
Ledger
Sundershan'sAccount
Dr. Cr.
Partic Amou Partic
Date ulars J.F. nt Rs Date ulars J.F. Amount Rs
2016 2016
Bills
Rece
Feb.1 Sale 40,0 Feb.1 ivabl
3 s 00 3 e 40,000
Bill
sent
for
Mar.0 Colle 13,0 Mar.1
7 ction 00 0 Cash 13,081
Mar.0 Inter Mar.1
7 est 81 9 Cash 5,050
Page 61
Mar.1 5,00
6 Bank 0 Apr.01 Cash 10,132
Mar.1 Inter
6 est 50 May19 Cash 12,360
Mar.2 Must 10,0
8 aq 00
Mar.2 Inter
8 est 132
Bills
Rece
May ivabl 12,0
16 e 00
May Inter
16 est 360
80,6
23 80,623
Mustaq'sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Feb.13 B/R 10,000 Mar.28 Sudershan 10,000
Feb.13 Discount Received 200 Mar.28 Discount Received 200
10,200 10,200
Books of Sudershan
6 Bank 0 Apr.01 Cash 10,132
Mar.1 Inter
6 est 50 May19 Cash 12,360
Mar.2 Must 10,0
8 aq 00
Mar.2 Inter
8 est 132
Bills
Rece
May ivabl 12,0
16 e 00
May Inter
16 est 360
80,6
23 80,623
Mustaq'sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Feb.13 B/R 10,000 Mar.28 Sudershan 10,000
Feb.13 Discount Received 200 Mar.28 Discount Received 200
10,200 10,200
Books of Sudershan
Page 62
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.13 Purchases A/c Dr. 40,000
To Ravi 40,000
(Goods bought from Ravi)
Feb.13 Ravi Dr. 40,000
To Bills Payable A/c 40,000
(Four bills drawn by Ravi accepted: the first bill for
Rs 5,000 payable after one month, the second for
Rs 10,000 payable after 40 days, the third for Rs 12,000
payable after 3 months and the fourth for Rs 13,000
payable after 19 days)
Mar.07 Bills Payable A/c Dr. 13,000
To Ravi 13,000
(The fourth bill dishonoured)
Mar.07 Interest A/c Dr. 81
To Ravi 81
(Interest charged for the amount of fourth bill
at 12% p.a.)
Mar.10 Ravi Dr. 13,081
To Cash A/c 13,081
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Feb.13 Purchases A/c Dr. 40,000
To Ravi 40,000
(Goods bought from Ravi)
Feb.13 Ravi Dr. 40,000
To Bills Payable A/c 40,000
(Four bills drawn by Ravi accepted: the first bill for
Rs 5,000 payable after one month, the second for
Rs 10,000 payable after 40 days, the third for Rs 12,000
payable after 3 months and the fourth for Rs 13,000
payable after 19 days)
Mar.07 Bills Payable A/c Dr. 13,000
To Ravi 13,000
(The fourth bill dishonoured)
Mar.07 Interest A/c Dr. 81
To Ravi 81
(Interest charged for the amount of fourth bill
at 12% p.a.)
Mar.10 Ravi Dr. 13,081
To Cash A/c 13,081
Page 63
(Cash paid to Ravi for amount due on account of
dishounor of the fourth bill along with interest
at 12% p.a. for 19 days)
Mar.16 Bills Payable A/c Dr. 5,000
To Ravi 5,000
(The first bill dishonoured)
Mar.16 Interest A/c Dr. 50
To Ravi 50
(Interest charged at 12% p.a. on the first bill for one month)
Mar.19 Ravi Dr. 5,050
To Cash A/c 5,050
(Cash paid to Ravi for amount due on account of
dishounor of the first bill along with interest
at 12% p.a. for one month)
Mar.28 Bills Payable A/c Dr. 10,000
To Ravi 10,000
(The second bill dishonoured)
Mar.28 Interest A/c Dr. 132
To Ravi 132
(Interest charged at 12% p.a. for 40 days on the second bill)
Apr.01 Ravi Dr. 10,132
dishounor of the fourth bill along with interest
at 12% p.a. for 19 days)
Mar.16 Bills Payable A/c Dr. 5,000
To Ravi 5,000
(The first bill dishonoured)
Mar.16 Interest A/c Dr. 50
To Ravi 50
(Interest charged at 12% p.a. on the first bill for one month)
Mar.19 Ravi Dr. 5,050
To Cash A/c 5,050
(Cash paid to Ravi for amount due on account of
dishounor of the first bill along with interest
at 12% p.a. for one month)
Mar.28 Bills Payable A/c Dr. 10,000
To Ravi 10,000
(The second bill dishonoured)
Mar.28 Interest A/c Dr. 132
To Ravi 132
(Interest charged at 12% p.a. for 40 days on the second bill)
Apr.01 Ravi Dr. 10,132
Page 64
To Cash A/c 10,132
(Cash paid to Ravi for amount due on account of
dishounor of the second bill along with interest
at 12% p.a. for 40 days)
May 16 Bills Payable A/c Dr. 12,000
To Ravi 12,000
(The third bill dishonoured)
Mar.16 Interest A/c Dr. 360
To Ravi 360
(Interest charged at 12% p.a. for 3 months on third bill)
May 19 Ravi Dr. 12,360
To Cash A/c 12,360
(Cash paid to Ravi for amount due on account of
dishounor of the third bill along with interest
at 12% p.a. for 3 months)
Books of Mustaq
Journal
Debit Credit
Date Particulars L.F Amount Amount
Rs Rs
2016
Feb.13 Bills Receivable A/c Dr. 10,000
Discount Allowed A/c Dr. 200
To Ravi 10,200
(Cash paid to Ravi for amount due on account of
dishounor of the second bill along with interest
at 12% p.a. for 40 days)
May 16 Bills Payable A/c Dr. 12,000
To Ravi 12,000
(The third bill dishonoured)
Mar.16 Interest A/c Dr. 360
To Ravi 360
(Interest charged at 12% p.a. for 3 months on third bill)
May 19 Ravi Dr. 12,360
To Cash A/c 12,360
(Cash paid to Ravi for amount due on account of
dishounor of the third bill along with interest
at 12% p.a. for 3 months)
Books of Mustaq
Journal
Debit Credit
Date Particulars L.F Amount Amount
Rs Rs
2016
Feb.13 Bills Receivable A/c Dr. 10,000
Discount Allowed A/c Dr. 200
To Ravi 10,200
Page 65
(Bills Receivable received from Ravi and
allowed discount)
Mar.28 Ravi Dr. 10,200
To Bills Receivable A/c 10,000
To Discount Received 200
(Bill dishonoured)
Books of Bank
Journal
Debit Credit
Date Particulars L.F Amount Amount
Rs Rs
2016
Mar.03 Bills Receivable A/c Dr. 13,000
To Bills for Collection A/c 13,000
(Bill received from Ravi for collection)
Mar.07 Bills for Collection A/c Dr. 13,000
To Bills Receivable A/c 13,000
(Bill dishonoured)
Page : 312 , Block Name : Numerical Questions
Q11 On Jan 01, 2016 Neha sold goods for Rs 20,000 to Muskan and drew upon her a bill of
exchange payable after two months. One month before the maturity of the bill Muskan
approached Neha to accept the payment against the bill at a rebate @ 12% p.a. Neha agreed to
the request of Muskan and Muskan retired the bill under the agreed rate of rebate. Journalise
the above transaction in the books of Neha and Muskan.
Answer. Books of Neha
allowed discount)
Mar.28 Ravi Dr. 10,200
To Bills Receivable A/c 10,000
To Discount Received 200
(Bill dishonoured)
Books of Bank
Journal
Debit Credit
Date Particulars L.F Amount Amount
Rs Rs
2016
Mar.03 Bills Receivable A/c Dr. 13,000
To Bills for Collection A/c 13,000
(Bill received from Ravi for collection)
Mar.07 Bills for Collection A/c Dr. 13,000
To Bills Receivable A/c 13,000
(Bill dishonoured)
Page : 312 , Block Name : Numerical Questions
Q11 On Jan 01, 2016 Neha sold goods for Rs 20,000 to Muskan and drew upon her a bill of
exchange payable after two months. One month before the maturity of the bill Muskan
approached Neha to accept the payment against the bill at a rebate @ 12% p.a. Neha agreed to
the request of Muskan and Muskan retired the bill under the agreed rate of rebate. Journalise
the above transaction in the books of Neha and Muskan.
Answer. Books of Neha
Page 66
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Muskan Dr. 20,000
To Sales A/c 20,000
(Goods sold to Muskan)
Jan.01 Bills Receivable A/c Dr. 20,000
To Muskan 20,000
(Muskan's acceptance received)
Feb.04 Cash A/c Dr. 19,800
Rebate on bill A/c Dr. 200
To Bills Receivable A/c 20,000
(Muskan’s acceptance retired one month before
maturity and allowed rebate at 12% p.a.)
Books of Muskan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Purchases A/c Dr. 20,000
To Neha 20,000
(Goods bought from Neha)
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Muskan Dr. 20,000
To Sales A/c 20,000
(Goods sold to Muskan)
Jan.01 Bills Receivable A/c Dr. 20,000
To Muskan 20,000
(Muskan's acceptance received)
Feb.04 Cash A/c Dr. 19,800
Rebate on bill A/c Dr. 200
To Bills Receivable A/c 20,000
(Muskan’s acceptance retired one month before
maturity and allowed rebate at 12% p.a.)
Books of Muskan
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.01 Purchases A/c Dr. 20,000
To Neha 20,000
(Goods bought from Neha)
Page 67
Jan.01 Neha Dr. 20,000
To Bills Payable A/c 20,000
(Bill drawn by Neha payable after 2 months
accepted)
Feb.04 Bills Payable A/c Dr. 20,000
To Cash A/c 19,800
To Rebate on Bills A/c 200
(Bill paid one month before maturity and received
rebate at 12% p.a.)
Page : 313 , Block Name : Numerical Questions
Q12 On Jan 15, 2016 Raghu sold goods worth Rs 35,000 to Devendra and drew up to the latter
three bills of exchanges. The first bill was for Rs 5,000 payable after one month, the second bill
was for Rs 20,000 payable after three months and third bill for balance amount for 4 months.
Raghu endorsed the first bill in favour of his creditor Dewan in full settlement of a debt of Rs
5,200. The second bill was discounted by Raghu @ 6 % p.a. and the third bill was retained by
Raghu till the date of maturity. Devendra dishonoured the bill on maturity and the bank paid Rs
30 as noting charges. Four days before the maturity of the third bill Raghu, sent the same for
collection to his bank. The third bill was also dishonoured by Devendra and the bank paid Rs
200 as noting charges. Five days after the dishonour of the bill Devendra paid the entire amount
due to Raghu along with interest Rs 1,000 for this purpose Devendra obtained a short term loan
from his bank. You are requested to record the necessary journal entries in the books of Raghu
Devendra and Dewan and also prepare Devendra’s account in Raghu’s books and
Raghu’s account in Devendra’s account.
Answer. Books of Raghu
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2016
Jan.15 Devendra Dr. 35,000
To Bills Payable A/c 20,000
(Bill drawn by Neha payable after 2 months
accepted)
Feb.04 Bills Payable A/c Dr. 20,000
To Cash A/c 19,800
To Rebate on Bills A/c 200
(Bill paid one month before maturity and received
rebate at 12% p.a.)
Page : 313 , Block Name : Numerical Questions
Q12 On Jan 15, 2016 Raghu sold goods worth Rs 35,000 to Devendra and drew up to the latter
three bills of exchanges. The first bill was for Rs 5,000 payable after one month, the second bill
was for Rs 20,000 payable after three months and third bill for balance amount for 4 months.
Raghu endorsed the first bill in favour of his creditor Dewan in full settlement of a debt of Rs
5,200. The second bill was discounted by Raghu @ 6 % p.a. and the third bill was retained by
Raghu till the date of maturity. Devendra dishonoured the bill on maturity and the bank paid Rs
30 as noting charges. Four days before the maturity of the third bill Raghu, sent the same for
collection to his bank. The third bill was also dishonoured by Devendra and the bank paid Rs
200 as noting charges. Five days after the dishonour of the bill Devendra paid the entire amount
due to Raghu along with interest Rs 1,000 for this purpose Devendra obtained a short term loan
from his bank. You are requested to record the necessary journal entries in the books of Raghu
Devendra and Dewan and also prepare Devendra’s account in Raghu’s books and
Raghu’s account in Devendra’s account.
Answer. Books of Raghu
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2016
Jan.15 Devendra Dr. 35,000
Page 68
To Sales A/c 35,000
(Goods sold to Devendra)
Jan.15 Bills Receivable A/c Dr. 35,000
To Devendra 35,000
(Three bills received from Devendra–the first bill Rs 5,000,
the second bill Rs 20,000, the third bill Rs 10,000)
Jan.15 Dewan Dr. 5,200
To Bills Receivable A/c 5,000
To Discount Received A/c 200
(The first bill endorsed to Dewan in full settlement
of amount due to him)
Jan.15 Bank A/c Dr. 19,700
Discount A/c Dr. 300
To Bills Receivable A/c 20,000
(The second bill discounted with bank at 6% p.a.)
Apr.18 Devendra Dr. 20,030
To Bank A/c 20,030
(The second bill dishonoured and bank paid
Rs 30 for noting charges)
May14 Bill Sent for Collection A/c Dr. 10,000
To Bills Receivable A/c 10,000
(Goods sold to Devendra)
Jan.15 Bills Receivable A/c Dr. 35,000
To Devendra 35,000
(Three bills received from Devendra–the first bill Rs 5,000,
the second bill Rs 20,000, the third bill Rs 10,000)
Jan.15 Dewan Dr. 5,200
To Bills Receivable A/c 5,000
To Discount Received A/c 200
(The first bill endorsed to Dewan in full settlement
of amount due to him)
Jan.15 Bank A/c Dr. 19,700
Discount A/c Dr. 300
To Bills Receivable A/c 20,000
(The second bill discounted with bank at 6% p.a.)
Apr.18 Devendra Dr. 20,030
To Bank A/c 20,030
(The second bill dishonoured and bank paid
Rs 30 for noting charges)
May14 Bill Sent for Collection A/c Dr. 10,000
To Bills Receivable A/c 10,000
Page 69
(The third bill sent to bank for collection)
May18 Davendra Dr. 10,200
To Bill sent for collection A/c 10,000
To Bank A/c 200
(The third bill dishonoured and bank paid Rs 200
as noting charges)
May23 Davendra Dr. 1,000
To Interest A/c 1,000
(Interest due to Devendra on account of bills
dishonoured)
May23 Cash A/c Dr. 31,230
To Davendra 31,230
(Cash received from Davendra)
Ledger
Davendra'sAccount
Dr. Cr.
Date Particulars J.F. Amount Rs Date Particulars J.F. Amount Rs
2016 2016
Bills
Receivabl
Jan.15 Sales Jan.15 e
35,000 35,000
Apr.18 Bank May23 Cash
20,030 31,230
May18 Bills Sent 10,000
for
May18 Davendra Dr. 10,200
To Bill sent for collection A/c 10,000
To Bank A/c 200
(The third bill dishonoured and bank paid Rs 200
as noting charges)
May23 Davendra Dr. 1,000
To Interest A/c 1,000
(Interest due to Devendra on account of bills
dishonoured)
May23 Cash A/c Dr. 31,230
To Davendra 31,230
(Cash received from Davendra)
Ledger
Davendra'sAccount
Dr. Cr.
Date Particulars J.F. Amount Rs Date Particulars J.F. Amount Rs
2016 2016
Bills
Receivabl
Jan.15 Sales Jan.15 e
35,000 35,000
Apr.18 Bank May23 Cash
20,030 31,230
May18 Bills Sent 10,000
for
Page 70
Collection
May18 Bank
200
May23 Interest
1,000
66,230 66,230
Books of Davendra
Journal
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2016
Purchase
Jan.15 s A/c Dr. 35,000
To Raghu 35,000
(Goods
bought
from
Raghu)
Jan.15 Raghu Dr. 35,000
To Bills
Payable
A/c 35,000
(Three
bills
drawn by
Raghu
accepted:
the first
bill for
Rs 5,000
payable
after one
month,
the
May18 Bank
200
May23 Interest
1,000
66,230 66,230
Books of Davendra
Journal
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2016
Purchase
Jan.15 s A/c Dr. 35,000
To Raghu 35,000
(Goods
bought
from
Raghu)
Jan.15 Raghu Dr. 35,000
To Bills
Payable
A/c 35,000
(Three
bills
drawn by
Raghu
accepted:
the first
bill for
Rs 5,000
payable
after one
month,
the
Page 71
second
for Rs
20,000
payable
after 3
months
and the
third for
Rs
10,000
payable
after 4
months)
Bills
Payable
Feb.18 A/c Dr. 5,000
To Cash 5,000
(The first
bill
discharge
d on the
due date)
Bills
Payable
Apr.18 A/c Dr. 20,000
Noting
Charges
A/c Dr. 30
To Raghu 20,030
(The
second
bill
dishonour
ed and
Noting C
harges
Rs 30)
for Rs
20,000
payable
after 3
months
and the
third for
Rs
10,000
payable
after 4
months)
Bills
Payable
Feb.18 A/c Dr. 5,000
To Cash 5,000
(The first
bill
discharge
d on the
due date)
Bills
Payable
Apr.18 A/c Dr. 20,000
Noting
Charges
A/c Dr. 30
To Raghu 20,030
(The
second
bill
dishonour
ed and
Noting C
harges
Rs 30)
Page 72
Bills
Payable
May18 A/c Dr. 10,000
Noting
Charges
A/c Dr. 200
To Raghu 10,200
(The third
bill
dishonour
ed and
Noting
Charges
Rs 200)
Interest
May23 A/c Dr. 1,000
To Raghu 1,000
(Interest
charged
Rs 1,000
on
account
of
bills
dishonour
ed)
May23 Cash A/c Dr. 31,230
To Bank
Loan A/c 31,230
(Bank
loan
taken for
settling
Raghu's
account)
Payable
May18 A/c Dr. 10,000
Noting
Charges
A/c Dr. 200
To Raghu 10,200
(The third
bill
dishonour
ed and
Noting
Charges
Rs 200)
Interest
May23 A/c Dr. 1,000
To Raghu 1,000
(Interest
charged
Rs 1,000
on
account
of
bills
dishonour
ed)
May23 Cash A/c Dr. 31,230
To Bank
Loan A/c 31,230
(Bank
loan
taken for
settling
Raghu's
account)
Page 73
May23 Raghu Dr. 31,230
To Cash
A/c 31,230
(Cash
paid to
Raghu)
Ledger
Raghu’sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Jan.15 Bills Payable 35,000 Jan.15 Purchases 35,000
May23 Cash 31,230 Apr.18 Bills Payable 20,000
Apr.18 Noting Charges 30
May18 Bills Payable 10,000
May18 Noting Charges 200
May18 Interest 1,000
66,230 66,230
Books of Dewan
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
To Cash
A/c 31,230
(Cash
paid to
Raghu)
Ledger
Raghu’sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2016 2016
Jan.15 Bills Payable 35,000 Jan.15 Purchases 35,000
May23 Cash 31,230 Apr.18 Bills Payable 20,000
Apr.18 Noting Charges 30
May18 Bills Payable 10,000
May18 Noting Charges 200
May18 Interest 1,000
66,230 66,230
Books of Dewan
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
Page 74
2016
Jan.15 Bills Receivable A/c Dr. 5,000
Discount Allowed A/c Dr. 200
To Raghu 5,200
(Bill Receivable received from Raghu for one month and
allowed him discount of Rs 200)
Feb.18 Cash A/c Dr. 5,000
To Bills Receivable A/c 5,000
(Bill met on maturity)
Note: In this question, there is no information regarding honour of the first bill of Rs 5,000.
Therefore, it has been assumed that the first bill has been met on maturity.
Page : 313 , Block Name : Numerical Questions
Q13 Vimal purchased goods Rs 25,000 from Kamal on Jan 15, 2016 and accepted a bill of
exchange drawn upon him by Kamal payable after two months. On the date of the maturity the
bill was duly presented for payment. Vimal dishonoured the bill. record the necessary journal
entries in the books of Kamal and Vimal when.
→ The bill was retained by Kamal till the date of its maturity.
→ The bill was immediately discounted by Kamal with his bank @ 6% p.a.
→ The bill was endorsed by Kamal in favour of his creditor Sharad.
→ Five days before its maturity the bill was sent by Kamal to his bank for collection.
Answer. Case (i) : The bill was retained by Kamal till the date of its maturity
Books of Kamal
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2016
Jan.15 Vimal Dr. 25,000
Jan.15 Bills Receivable A/c Dr. 5,000
Discount Allowed A/c Dr. 200
To Raghu 5,200
(Bill Receivable received from Raghu for one month and
allowed him discount of Rs 200)
Feb.18 Cash A/c Dr. 5,000
To Bills Receivable A/c 5,000
(Bill met on maturity)
Note: In this question, there is no information regarding honour of the first bill of Rs 5,000.
Therefore, it has been assumed that the first bill has been met on maturity.
Page : 313 , Block Name : Numerical Questions
Q13 Vimal purchased goods Rs 25,000 from Kamal on Jan 15, 2016 and accepted a bill of
exchange drawn upon him by Kamal payable after two months. On the date of the maturity the
bill was duly presented for payment. Vimal dishonoured the bill. record the necessary journal
entries in the books of Kamal and Vimal when.
→ The bill was retained by Kamal till the date of its maturity.
→ The bill was immediately discounted by Kamal with his bank @ 6% p.a.
→ The bill was endorsed by Kamal in favour of his creditor Sharad.
→ Five days before its maturity the bill was sent by Kamal to his bank for collection.
Answer. Case (i) : The bill was retained by Kamal till the date of its maturity
Books of Kamal
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2016
Jan.15 Vimal Dr. 25,000
Page 75
To Sales
A/c 25,000
(Goods
sold to
Vimal)
Bills
Receivabl
Jan.15 e A/c Dr. 25,000
To Vimal 25,000
(Vimal's
acceptanc
e reccived)
Mar.18 Vimal Dr. 25,000
To Bills
Receivabl
e A/c 25,000
(Vimal
acceptanc
e
dishonour
ed)
Books of Vimal
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
A/c 25,000
(Goods
sold to
Vimal)
Bills
Receivabl
Jan.15 e A/c Dr. 25,000
To Vimal 25,000
(Vimal's
acceptanc
e reccived)
Mar.18 Vimal Dr. 25,000
To Bills
Receivabl
e A/c 25,000
(Vimal
acceptanc
e
dishonour
ed)
Books of Vimal
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Page 76
Jan.15 Kamal Dr. 25,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Case (ii) : The bill was immediately discounted by Kamal with his bank @ 6% p.a.
Books of Kamal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Jan.15 Vimal Dr. 25,000
To Sales A/c 25,000
(Goods sold to Vimal)
Jan.15 Bills Receivable A/c Dr. 25,000
To Vimal 25,000
(Vimal's acceptance received)
Jan.15 Bank A/c Dr. 24,750
Discount A/c Dr. 250
To Bills Receivable A/c 25,000
(Vimal's acceptance discounted at 6% p.a. with
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Case (ii) : The bill was immediately discounted by Kamal with his bank @ 6% p.a.
Books of Kamal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Jan.15 Vimal Dr. 25,000
To Sales A/c 25,000
(Goods sold to Vimal)
Jan.15 Bills Receivable A/c Dr. 25,000
To Vimal 25,000
(Vimal's acceptance received)
Jan.15 Bank A/c Dr. 24,750
Discount A/c Dr. 250
To Bills Receivable A/c 25,000
(Vimal's acceptance discounted at 6% p.a. with
Page 77
bank)
Mar.18 Vimal Dr. 25,000
To Bank A/c 25,000
(Vimal's aceptance dishonoured)
Books of Vimal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Jan.15 Kamal Dr. 25,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Case (iii) : The bill was endorsed by Kamal in favour of his creditor Sharad
Books of Kamal
Journal
Mar.18 Vimal Dr. 25,000
To Bank A/c 25,000
(Vimal's aceptance dishonoured)
Books of Vimal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Jan.15 Kamal Dr. 25,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Case (iii) : The bill was endorsed by Kamal in favour of his creditor Sharad
Books of Kamal
Journal
Page 78
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2016
Jan.15 Vimal Dr. 25,000
To Sales
A/c 25,000
(Goods
sold to
Vimal)
Bills
Receivabl
Jan.15 e A/c Dr. 25,000
To Vimal 25,000
(Vimal's
acceptenc
e
received)
Jan.15 Sharad Dr. 25,000
To Bills
Receivabl
e A/c 25,000
(Vimal's
acceptanc
e
endorsed
to Sharad)
Mar.18 Vimal Dr. 25,000
To Sharad 25,000
(Vimal's
acceptanc
e
Date Particulars L.F. Credit Amount Rs
Amount Rs
2016
Jan.15 Vimal Dr. 25,000
To Sales
A/c 25,000
(Goods
sold to
Vimal)
Bills
Receivabl
Jan.15 e A/c Dr. 25,000
To Vimal 25,000
(Vimal's
acceptenc
e
received)
Jan.15 Sharad Dr. 25,000
To Bills
Receivabl
e A/c 25,000
(Vimal's
acceptanc
e
endorsed
to Sharad)
Mar.18 Vimal Dr. 25,000
To Sharad 25,000
(Vimal's
acceptanc
e
Page 79
endorsed
to Kamal
dishonour
ed)
Books of Vimal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Jan.15 Kamal Dr. 25,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Case (iv) : Five days before its maturity the bill was sent by Kamal to his bank for collection
Books of Kamal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
to Kamal
dishonour
ed)
Books of Vimal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Jan.15 Kamal Dr. 25,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Case (iv) : Five days before its maturity the bill was sent by Kamal to his bank for collection
Books of Kamal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
Page 80
2016
Jan.15 Vimal Dr. 25,000
To Sales A/c 25,000
(Goods sold to Vimal)
Jan.15 Bills Receivable A/c Dr. 25,000
To Vimal 25,000
(Vimal's acceptance received, payable after two
months)
Mar.13 Bill Sent for Collection A/c Dr. 25,000
To Bills Receivable A/c 25,000
(Vimal's acceptance sent to bank for collection)
Mar.18 Vimal Dr. 25,000
To Bill Sent for Collection 25,000
(Vimal's acceptance dishonoured)
Books of Vimal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
Case (iii)
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Jan.15 Vimal Dr. 25,000
To Sales A/c 25,000
(Goods sold to Vimal)
Jan.15 Bills Receivable A/c Dr. 25,000
To Vimal 25,000
(Vimal's acceptance received, payable after two
months)
Mar.13 Bill Sent for Collection A/c Dr. 25,000
To Bills Receivable A/c 25,000
(Vimal's acceptance sent to bank for collection)
Mar.18 Vimal Dr. 25,000
To Bill Sent for Collection 25,000
(Vimal's acceptance dishonoured)
Books of Vimal
Journal
Debit
Credit
Date Particulars L.F. Amount
Amount Rs
Rs
Case (iii)
2016
Jan.15 Purchases A/c Dr. 25,000
To Kamal 25,000
(Goods bought from Kamal)
Page 81
Jan.15 Kamal Dr. 25,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Page : 314 , Block Name : Numerical Questions
Q14 Abdula sold goods to Tahir on Jan 17, 2017 for Rs 18,000. He drew a bill of exchange for
the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it
to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla
paid Rs 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his
debt by making a payment of Rs 18,700 including interest and noting charges. Record the
necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir's account in the
books of Abdulla and Abdulla's account in the books of Tahir.
Answer. Books of Abdula
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.17 Tahir Dr. 18,000
To Sales A/c 18,000
(Goods sold to Tahir)
Jan.17 Bills Receivable A/c Dr. 18,000
To Tahir 18,000
To Bills Payable A/c 25,000
(Bill drawn by Kamal accepted)
Mar.18 Bills Payable A/c Dr. 25,000
To Kamal 25,000
(Bill drawn by Kamal dishonoured)
Page : 314 , Block Name : Numerical Questions
Q14 Abdula sold goods to Tahir on Jan 17, 2017 for Rs 18,000. He drew a bill of exchange for
the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it
to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla
paid Rs 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his
debt by making a payment of Rs 18,700 including interest and noting charges. Record the
necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir's account in the
books of Abdulla and Abdulla's account in the books of Tahir.
Answer. Books of Abdula
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.17 Tahir Dr. 18,000
To Sales A/c 18,000
(Goods sold to Tahir)
Jan.17 Bills Receivable A/c Dr. 18,000
To Tahir 18,000
Page 82
(Tahir's acceptance received)
Mar.06 Tahir Dr. 18,040
To Bills Receivable A/c 18,000
To Cash 40
(Tahir's acceptance dishonoured and Rs 40 paid as
noting charges)
Mar.06 Tahir Dr. 660
To Interest A/c 660
(Interest charged from Tahir on account of bill
dishonoured)
Mar.12 Cash A/c Dr. 18,700
To Tahir 18,700
(Tahir cleared his account by paying cash)
Ledger
Tahir’s Account
Dr. Cr.
Date Particulars J.F. Amount Rs Date Particulars J.F. Amount Rs
2017 2017
Bills
Receivabl
Jan.17 Sales 18,000 Jan.17 e 18,000
Bills
Receivabl
Mar.06 e 18,000 Mar.11 Cash 18,700
Mar.06 Cash 40
Mar.06 Tahir Dr. 18,040
To Bills Receivable A/c 18,000
To Cash 40
(Tahir's acceptance dishonoured and Rs 40 paid as
noting charges)
Mar.06 Tahir Dr. 660
To Interest A/c 660
(Interest charged from Tahir on account of bill
dishonoured)
Mar.12 Cash A/c Dr. 18,700
To Tahir 18,700
(Tahir cleared his account by paying cash)
Ledger
Tahir’s Account
Dr. Cr.
Date Particulars J.F. Amount Rs Date Particulars J.F. Amount Rs
2017 2017
Bills
Receivabl
Jan.17 Sales 18,000 Jan.17 e 18,000
Bills
Receivabl
Mar.06 e 18,000 Mar.11 Cash 18,700
Mar.06 Cash 40
Page 83
Mar.06 Interest 660
36,700 36,700
Books of Tahir
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.17 Purchases A/c Dr. 18,000
To Abdula 18,000
(Goods bought from Abdula)
Jan.17 Abdula Dr. 18,000
To Bills Payable A/c 18,000
(Bill drawn by Abdula accepted, payable after 15 days)
Mar.06 Bills Payable A/c Dr. 18,000
Noting Charges A/c Dr. 40
To Abdula 18,040
(Abula’s bill dishonoured)
Mar.07 Interest A/c Dr. 660
To Abdula 660
(Interest charged on account of bill dishonoured)
36,700 36,700
Books of Tahir
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.17 Purchases A/c Dr. 18,000
To Abdula 18,000
(Goods bought from Abdula)
Jan.17 Abdula Dr. 18,000
To Bills Payable A/c 18,000
(Bill drawn by Abdula accepted, payable after 15 days)
Mar.06 Bills Payable A/c Dr. 18,000
Noting Charges A/c Dr. 40
To Abdula 18,040
(Abula’s bill dishonoured)
Mar.07 Interest A/c Dr. 660
To Abdula 660
(Interest charged on account of bill dishonoured)
Page 84
Mar.11 Abdula Dr. 18,700
To Cash A/c 18,700
(Cash paid to Abdula)
Ledger
Abdula’sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
Rs Rs
2017 2017
Jan.17 Bills Payable 18,000 Jan.17 Purchases 18,000
Mar.11 Cash 18,700 Mar.06 Bills Payable 18,000
Mar.06 Noting Charges 40
Mar.06 Interest 660
36,700 36,700
Page : 314 , Block Name : Numerical Questions
Q15 Asha sold goods worth Rs 19,000 to Nisha on March 02, 2017. Rs 4,000 were paid by
Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha
payable after three months. Asha discounted the bill immediately with her bank. On the due date
Nisha dishonoured the bill and the bank paid Rs 30 as noting charges.
Record the necessary journal entries in the books of Asha and Nisha.
Answer. Books of Asha
Journal
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2017
Mar.02 Nisha Dr. 19,000
To Cash A/c 18,700
(Cash paid to Abdula)
Ledger
Abdula’sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
Rs Rs
2017 2017
Jan.17 Bills Payable 18,000 Jan.17 Purchases 18,000
Mar.11 Cash 18,700 Mar.06 Bills Payable 18,000
Mar.06 Noting Charges 40
Mar.06 Interest 660
36,700 36,700
Page : 314 , Block Name : Numerical Questions
Q15 Asha sold goods worth Rs 19,000 to Nisha on March 02, 2017. Rs 4,000 were paid by
Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha
payable after three months. Asha discounted the bill immediately with her bank. On the due date
Nisha dishonoured the bill and the bank paid Rs 30 as noting charges.
Record the necessary journal entries in the books of Asha and Nisha.
Answer. Books of Asha
Journal
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2017
Mar.02 Nisha Dr. 19,000
Page 85
To Sales A/c 19,000
(Goods
sold to
Nisha)
Mar.02 Cash A/c Dr. 4,000
Bills
Receivabl
e A/c Dr. 15,000
To Nisha 19,000
(Cash and
Nisha's
acceptanc
e
received)
Mar.02 Bank A/c Dr. 14,635
Discount
A/c Dr. 375
To Bills
Receivable
A/c 15,000
(Nisha's
aceptance
discounted
with bank
at 10%
p.a.)
Note: In
this Qrate
of discount
is not
given, the
rate of
discount
(10% p.a.)
(Goods
sold to
Nisha)
Mar.02 Cash A/c Dr. 4,000
Bills
Receivabl
e A/c Dr. 15,000
To Nisha 19,000
(Cash and
Nisha's
acceptanc
e
received)
Mar.02 Bank A/c Dr. 14,635
Discount
A/c Dr. 375
To Bills
Receivable
A/c 15,000
(Nisha's
aceptance
discounted
with bank
at 10%
p.a.)
Note: In
this Qrate
of discount
is not
given, the
rate of
discount
(10% p.a.)
Page 86
has been
assumed)
.
June.05 Nisha Dr. 15,030
To Bank A/c 15,030
(Nisha's
acceptanc
e
dishonour
ed and
bank
paid Rs
30 as
noting
charges)
Books of Nisha
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Mar.02 Purchases A/c Dr. 19,000
To Asha 19,000
(Goods bought from Asha)
Mar.02 Asha Dr. 19,000
To Bills Payable A/c 15,000
To Cash A/c 4,000
(Asha's bill accepted payable after three month and
assumed)
.
June.05 Nisha Dr. 15,030
To Bank A/c 15,030
(Nisha's
acceptanc
e
dishonour
ed and
bank
paid Rs
30 as
noting
charges)
Books of Nisha
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Mar.02 Purchases A/c Dr. 19,000
To Asha 19,000
(Goods bought from Asha)
Mar.02 Asha Dr. 19,000
To Bills Payable A/c 15,000
To Cash A/c 4,000
(Asha's bill accepted payable after three month and
Page 87
Rs 4,000 paid in cash)
Jun.05 Bills Payable A/c Dr. 15,000
Noting Charges A/c Dr. 30
To Asha 15,030
(Asha’s bill dishonoured)
Page : 314 , Block Name : Numerical Questions
Q16 On Feb. 02, 2017, Verma purchased from Sharma goods for Rs 17,500. Verma paid Rs
2,500 immediately and for the balance gave a promissory note to Sharma payable after 60
days. Sharma immediately endorsed the promissory note in favour of his creditor.
Gupta for the full settlement of a debt of Rs 15,400. On the due date of the bill Gupta presented
the bill to Verma which the latter dishonoured and Gupta paid Rs 5,000 noting charges. On the
same date Gupta informed Sharma about the dishonour of the bill. Sharma settled his debt to
Gupta by cheque for Rs 15,500 which includes noting charges and interest. Verma settled
Sharma.s claim by cheque for the same amount.
Record the necessary journal entries is the books of Sharma, Gupta and Verma for the above
transaction and prepare Verma.s and Gupta.s accounts in the books of Sharma. Sharma.s
account in the books of Verma. And also Sharma.s account in the books of Gupta.
Answer. Books of Sharma
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Feb.02 Verma Dr. 17,500
To Sales A/c 17,500
(Goods sold to Verma)
Feb.02 Cash A/c Dr. 2,500
Bills Receivable A/c Dr. 15,000
Jun.05 Bills Payable A/c Dr. 15,000
Noting Charges A/c Dr. 30
To Asha 15,030
(Asha’s bill dishonoured)
Page : 314 , Block Name : Numerical Questions
Q16 On Feb. 02, 2017, Verma purchased from Sharma goods for Rs 17,500. Verma paid Rs
2,500 immediately and for the balance gave a promissory note to Sharma payable after 60
days. Sharma immediately endorsed the promissory note in favour of his creditor.
Gupta for the full settlement of a debt of Rs 15,400. On the due date of the bill Gupta presented
the bill to Verma which the latter dishonoured and Gupta paid Rs 5,000 noting charges. On the
same date Gupta informed Sharma about the dishonour of the bill. Sharma settled his debt to
Gupta by cheque for Rs 15,500 which includes noting charges and interest. Verma settled
Sharma.s claim by cheque for the same amount.
Record the necessary journal entries is the books of Sharma, Gupta and Verma for the above
transaction and prepare Verma.s and Gupta.s accounts in the books of Sharma. Sharma.s
account in the books of Verma. And also Sharma.s account in the books of Gupta.
Answer. Books of Sharma
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Feb.02 Verma Dr. 17,500
To Sales A/c 17,500
(Goods sold to Verma)
Feb.02 Cash A/c Dr. 2,500
Bills Receivable A/c Dr. 15,000
Page 88
To Verma 17,500
(Cash Rs 2,500 and Promissory Note Rs 15,000 received
from Verma for 60 days)
Feb.02 Gupta A/c Dr. 15,400
To Bills Receivable A/c 15,000
To Discount Received A/c 400
(Promissory Note endorsed to Gupta in full settlement
of amount due to him)
Apr.05 Discount Received A/c Dr. 400
Verma Dr. 15,050
To Gupta 15,450
(Promissory Note issued by Verma dishonoured
and Gupta paid Rs 50 as noting charges)
Note: In this QRs 5,000 is given as noting charges,
there is mistake. Here Rs 50 has been taken as noting
charges instead of Rs 5,000).
Apr.06 Interest A/c Dr. 50
To Gupta 50
(Interest of Rs 50 debited to Gupta, on account of
dishonour of Promissory Note)
Apr.06 Gupta Dr. 15,500
To Bank A/c 15,500
(Gupta's A/c settled)
(Cash Rs 2,500 and Promissory Note Rs 15,000 received
from Verma for 60 days)
Feb.02 Gupta A/c Dr. 15,400
To Bills Receivable A/c 15,000
To Discount Received A/c 400
(Promissory Note endorsed to Gupta in full settlement
of amount due to him)
Apr.05 Discount Received A/c Dr. 400
Verma Dr. 15,050
To Gupta 15,450
(Promissory Note issued by Verma dishonoured
and Gupta paid Rs 50 as noting charges)
Note: In this QRs 5,000 is given as noting charges,
there is mistake. Here Rs 50 has been taken as noting
charges instead of Rs 5,000).
Apr.06 Interest A/c Dr. 50
To Gupta 50
(Interest of Rs 50 debited to Gupta, on account of
dishonour of Promissory Note)
Apr.06 Gupta Dr. 15,500
To Bank A/c 15,500
(Gupta's A/c settled)
Page 89
Apr.06 Bank A/c Dr. 15,050
To Verma 15,050
(Cheque received from Verma for the amount due from him)
Ledger
Verma's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.02 Sales 17,500 Feb.02 Cash 2,500
Apr.06 Gupta 15,050 Feb.02 Bills Receivable 15,000
Apr.06 Bank 15,050
32,550 32,550
Gupta's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.02 B/R 15,000 Apr.01 Balance b/d 15,400
Feb.02 Discount Received 400 Apr.06 Verma 15,050
Feb.02 Bank 15,500 Apr.06 Discount Reserved 400
Apr.06 Interest 50
To Verma 15,050
(Cheque received from Verma for the amount due from him)
Ledger
Verma's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.02 Sales 17,500 Feb.02 Cash 2,500
Apr.06 Gupta 15,050 Feb.02 Bills Receivable 15,000
Apr.06 Bank 15,050
32,550 32,550
Gupta's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.02 B/R 15,000 Apr.01 Balance b/d 15,400
Feb.02 Discount Received 400 Apr.06 Verma 15,050
Feb.02 Bank 15,500 Apr.06 Discount Reserved 400
Apr.06 Interest 50
Page 90
30,900 30,900
Books of Verma
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2017
Feb.02 Purchases A/c Dr. 17,500
To Sharma 17,500
(Goods bought from Sharma)
Feb.02 Sharma Dr. 17,500
To Bills Payable A/c 15,000
To Cash A/c 2,500
(Cash Rs 2,500 paid and Promissory Note made for
the balance)
Apr.06 Bills Payable A/c Dr. 15,000
Noting Charges A/c Dr. 50
To Sharma 15,050
(Promissory Note dishonoured on maturity)
Apr.06 Sharma Dr. 15,050
To Bank A/c 15,050
(Payment made to Sharma through cheque)
Books of Verma
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2017
Feb.02 Purchases A/c Dr. 17,500
To Sharma 17,500
(Goods bought from Sharma)
Feb.02 Sharma Dr. 17,500
To Bills Payable A/c 15,000
To Cash A/c 2,500
(Cash Rs 2,500 paid and Promissory Note made for
the balance)
Apr.06 Bills Payable A/c Dr. 15,000
Noting Charges A/c Dr. 50
To Sharma 15,050
(Promissory Note dishonoured on maturity)
Apr.06 Sharma Dr. 15,050
To Bank A/c 15,050
(Payment made to Sharma through cheque)
Page 91
Ledger
Sharma's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.02 Cash 2,500 Feb.02 Purchases 17,500
Feb.02 Bills Payable 15,000 Apr.06 Bills Payable 15,000
Apr.06 Bank 50 Apr.06 Noting Charges 50
30,900 30,900
Books of Gupta
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2017
Feb.02 Bills Receivable A/c Dr. 15,000
Discount Allowed A/c Dr. 400
To Sharma 15,400
(Promissory Note Rs 15,000 received from Sharma in
full settlement for 60 days)
Apr.06 Sharma Dr. 15,450
Sharma's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.02 Cash 2,500 Feb.02 Purchases 17,500
Feb.02 Bills Payable 15,000 Apr.06 Bills Payable 15,000
Apr.06 Bank 50 Apr.06 Noting Charges 50
30,900 30,900
Books of Gupta
Journal
Debit Credit
Date Particulars L.F.
Amount Rs Amount Rs
2017
Feb.02 Bills Receivable A/c Dr. 15,000
Discount Allowed A/c Dr. 400
To Sharma 15,400
(Promissory Note Rs 15,000 received from Sharma in
full settlement for 60 days)
Apr.06 Sharma Dr. 15,450
Page 92
To Bills Receivable A/c 15,000
To Discount Allowed A/c 400
To Bank A/c 50
(Promissory Note received from Sharma, dishonoured)
Apr.06 Sharma Dr. 50
To Interest A/c 50
(Interest Rs 50 credited on account of Promissory Note
dishonoured)
Apr.06 Bank A/c Dr. 15,500
To Sharma 15,500
(Cheque received from Sharma)
Ledger
Sharma's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.01 Balance b/d 15,400 Feb.02 Bills Receivable 15,000
Apr.06 Bills Receivable 15,000 Feb.02 Discount Allowed 400
Apr.06 Discount Allowed 4,000 Apr.06 Bank 15,500
Apr.06 Bank 50
Apr.06 Interest 50
30,900 30,900
To Discount Allowed A/c 400
To Bank A/c 50
(Promissory Note received from Sharma, dishonoured)
Apr.06 Sharma Dr. 50
To Interest A/c 50
(Interest Rs 50 credited on account of Promissory Note
dishonoured)
Apr.06 Bank A/c Dr. 15,500
To Sharma 15,500
(Cheque received from Sharma)
Ledger
Sharma's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Feb.01 Balance b/d 15,400 Feb.02 Bills Receivable 15,000
Apr.06 Bills Receivable 15,000 Feb.02 Discount Allowed 400
Apr.06 Discount Allowed 4,000 Apr.06 Bank 15,500
Apr.06 Bank 50
Apr.06 Interest 50
30,900 30,900
Page 93
Page : 314 , Block Name : Numerical Questions
Q17 Lilly sold goods to Mathew on 1.3.2017 for Rs 12,000 and drew upon Mathew a bill of
exchange for the same amount payable after two months. Lilly immediately discounted the bill
with her bank at 9% p.a. The maturity date of the bill was a non business day (holiday),
therefore, Lilly had to present the bill as per the provisions of the Indian Instruments Act.1881.
The bill was dishonoured by Mathew and Lilly paid Rs 45 as noting charges. Mathew settled the
claim of Lilly five days after the dishonour of the bill by a cheque, which includes interest @ 12%
for the term of the bill. Journalise the above transactions in the books of Lilly and Mathew and
prepare Mathew’s account in the books of Lilly and Lilly’s account in the books of Mathew.
Answer. Books of Lilly
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Mar.01 Mathew Dr. 12,000
To Sales A/c 12,000
(Goods sold to Mathew)
Mar.01 Bills Receivable A/c Dr. 12,000
To Mathew 12,000
(Mathew's acceptance payable after two months received)
Mar.01 Bank A/c Dr. 11,820
Discount A/c Dr. 180
To Bills Receivable A/c 12,000
(Mathew’s bill discounted at 9% p.a.)
May 03 Mathew A/c Dr. 12,045
Q17 Lilly sold goods to Mathew on 1.3.2017 for Rs 12,000 and drew upon Mathew a bill of
exchange for the same amount payable after two months. Lilly immediately discounted the bill
with her bank at 9% p.a. The maturity date of the bill was a non business day (holiday),
therefore, Lilly had to present the bill as per the provisions of the Indian Instruments Act.1881.
The bill was dishonoured by Mathew and Lilly paid Rs 45 as noting charges. Mathew settled the
claim of Lilly five days after the dishonour of the bill by a cheque, which includes interest @ 12%
for the term of the bill. Journalise the above transactions in the books of Lilly and Mathew and
prepare Mathew’s account in the books of Lilly and Lilly’s account in the books of Mathew.
Answer. Books of Lilly
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Mar.01 Mathew Dr. 12,000
To Sales A/c 12,000
(Goods sold to Mathew)
Mar.01 Bills Receivable A/c Dr. 12,000
To Mathew 12,000
(Mathew's acceptance payable after two months received)
Mar.01 Bank A/c Dr. 11,820
Discount A/c Dr. 180
To Bills Receivable A/c 12,000
(Mathew’s bill discounted at 9% p.a.)
May 03 Mathew A/c Dr. 12,045
Page 94
To Bank A/c 12,045
(Mathew's acceptance dishonoured bank paid Rs 45 as
noting charges)
Note: In this question, May 04 has been considered as
Holiday, so the date of maturity will be May 03, 2006 in
place of May 04, 2006.
May 08 Mathew Dr. 241
To Interest A/c 241
(Interest @ 12% credited to Mathew on account of bill
dishonoured)
May 08 Bank A/c Dr. 12,286
To Mathew 12,286
(Cheque received from Mathew for the amount due from him)
Ledger
Mathew's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Mar.01 Sales 12,000 Mar.01 Bills Receivable 12,000
May03 Bank 12,045 May08 Bank 12,286
May08 Interest 241
24,286 24,286
(Mathew's acceptance dishonoured bank paid Rs 45 as
noting charges)
Note: In this question, May 04 has been considered as
Holiday, so the date of maturity will be May 03, 2006 in
place of May 04, 2006.
May 08 Mathew Dr. 241
To Interest A/c 241
(Interest @ 12% credited to Mathew on account of bill
dishonoured)
May 08 Bank A/c Dr. 12,286
To Mathew 12,286
(Cheque received from Mathew for the amount due from him)
Ledger
Mathew's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Mar.01 Sales 12,000 Mar.01 Bills Receivable 12,000
May03 Bank 12,045 May08 Bank 12,286
May08 Interest 241
24,286 24,286
Page 95
Books of Mathew
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Mar.01 Purchases A/c Dr. 12,000
To Lilly 12,000
(Goods bought from Lilly)
Mar.01 Lilly Dr. 12,000
To Bills Payable A/c 12,000
(Lilly's acceptance payable after two months accepted)
May 03 Bills Payable A/c Dr. 12,000
Noting Charges A/c Dr. 45
To Lilly 12,045
(Bill drawn by Lilly dishonoured)
May 08 Interest A/c Dr. 241
To Lilly 241
(Interest charged @ 12% from Lilly on account of bill
dishonoured)
May 08 Lilly Dr. 12,286
To Bank A/c 12,286
(Amount paid to Lilly through cheque)
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Mar.01 Purchases A/c Dr. 12,000
To Lilly 12,000
(Goods bought from Lilly)
Mar.01 Lilly Dr. 12,000
To Bills Payable A/c 12,000
(Lilly's acceptance payable after two months accepted)
May 03 Bills Payable A/c Dr. 12,000
Noting Charges A/c Dr. 45
To Lilly 12,045
(Bill drawn by Lilly dishonoured)
May 08 Interest A/c Dr. 241
To Lilly 241
(Interest charged @ 12% from Lilly on account of bill
dishonoured)
May 08 Lilly Dr. 12,286
To Bank A/c 12,286
(Amount paid to Lilly through cheque)
Page 96
Ledger
Lilly's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Mar.01 Bills Payable 12,000 Mar.01 Purchases 12,000
May 09 Bank 12,286 May 03 Bills Payable 12,000
May 03 Noting charges 45
May 08 Interest 241
24,286 24,286
Note: In this question, there is a contradiction. As per the discounting rule–Bank is regarded as
the holder of the bill. It is the bank who presents the bill for payment and also pays the noting
charges on behalf of the drawer (Lilly). However, as per the question, Lilly, who is presenting,
discounting the bill and also paying the noting charges. Thus, in the solution, we have assumed
that it is bank and not Lilly who presents, discounts and pays the noting charges in case of
dishonour of bill.
Page : 314 , Block Name : Numerical Questions
Q18 Kapil purchased goods for Rs 21,000 from Gaurav on 1.2.2017 and accepted a bill of
exchange drawn by Gaurav for the same amount. The bill was payable after one month. On
25.2.2017 Gaurav sent the bill to his bank for collection. The bill was duly presented by the
bank. Kapil dishonoured the bill and the bank paid Rs 100 as noting charges. Record the
necessary journal entries for the above transactions in the books of Kapil and Gourav.
Answer. Books of Gaurav
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
Lilly's Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
Mar.01 Bills Payable 12,000 Mar.01 Purchases 12,000
May 09 Bank 12,286 May 03 Bills Payable 12,000
May 03 Noting charges 45
May 08 Interest 241
24,286 24,286
Note: In this question, there is a contradiction. As per the discounting rule–Bank is regarded as
the holder of the bill. It is the bank who presents the bill for payment and also pays the noting
charges on behalf of the drawer (Lilly). However, as per the question, Lilly, who is presenting,
discounting the bill and also paying the noting charges. Thus, in the solution, we have assumed
that it is bank and not Lilly who presents, discounts and pays the noting charges in case of
dishonour of bill.
Page : 314 , Block Name : Numerical Questions
Q18 Kapil purchased goods for Rs 21,000 from Gaurav on 1.2.2017 and accepted a bill of
exchange drawn by Gaurav for the same amount. The bill was payable after one month. On
25.2.2017 Gaurav sent the bill to his bank for collection. The bill was duly presented by the
bank. Kapil dishonoured the bill and the bank paid Rs 100 as noting charges. Record the
necessary journal entries for the above transactions in the books of Kapil and Gourav.
Answer. Books of Gaurav
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
Page 97
2017
Feb.01 Kapil Dr. 21,000
To Sales A/c 21,000
(Goods sold to Kapil)
Feb.01 Bills Receivable A/c Dr. 21,000
To Kapil 21,000
(Kapil's acceptance received)
Feb.25 Bills Sent for Collection A/c Dr. 21,000
To Bills Receivable A/c 21,000
(Bill Receivable sent to bank for collection)
Mar.04 Kapil Dr. 21,100
To Bill Sent for Collection A/c 21,000
To Bank A/c 100
(Kapil's acceptance dishonoured)
Books of Kapil
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Feb.01 Purchases A/c Dr. 21,000
To Gaurav 21,000
(Goods bought from Gaurav)
Feb.01 Kapil Dr. 21,000
To Sales A/c 21,000
(Goods sold to Kapil)
Feb.01 Bills Receivable A/c Dr. 21,000
To Kapil 21,000
(Kapil's acceptance received)
Feb.25 Bills Sent for Collection A/c Dr. 21,000
To Bills Receivable A/c 21,000
(Bill Receivable sent to bank for collection)
Mar.04 Kapil Dr. 21,100
To Bill Sent for Collection A/c 21,000
To Bank A/c 100
(Kapil's acceptance dishonoured)
Books of Kapil
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Feb.01 Purchases A/c Dr. 21,000
To Gaurav 21,000
(Goods bought from Gaurav)
Page 98
Feb.01 Gaurav Dr. 21,000
To Bills Payable A/c 21,000
(Bill drawn by Gaurav payable after one month
accepted)
Mar.04 Bills Payable A/c Dr. 21,000
Noting Charges A/c Dr. 100
To Gaurav 21,100
(Bill drawn by Kapil dishonoured)
Page : 314 , Block Name : Numerical Questions
Q19 On Feb. 14, 2017 Rashmi sold good Rs 7,500 to Alka. Alka paid Rs 500 in cash and for the
bank balance accepted a bill of exchange drawn upon her by Rashmi payable after two months.
On Apr.10, 2017 Alka approached Rashmi to cancel the bill since she was short of funds. She
further requested Rashmi to accept Rs 2,000 in cash and draw a new bill for the balance
including interest Rs 500. Rashmi accepted Alka’s request and drew a new bill for the amount
due payable after 2 months. The bill was accepted by Alka. The new bill was duly met by Alka
on maturity.
Record the necessary journal entries in the books of Rashmi and Alka and prepared
Alka’s account in the books of Rashmi’s and Rashmi’s account in the books of Alka’s.
Answer. Books of Rashmi
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Feb.14 Alka Dr. 7,500
To Sales A/c 7,500
(Goods sold to Alka)
To Bills Payable A/c 21,000
(Bill drawn by Gaurav payable after one month
accepted)
Mar.04 Bills Payable A/c Dr. 21,000
Noting Charges A/c Dr. 100
To Gaurav 21,100
(Bill drawn by Kapil dishonoured)
Page : 314 , Block Name : Numerical Questions
Q19 On Feb. 14, 2017 Rashmi sold good Rs 7,500 to Alka. Alka paid Rs 500 in cash and for the
bank balance accepted a bill of exchange drawn upon her by Rashmi payable after two months.
On Apr.10, 2017 Alka approached Rashmi to cancel the bill since she was short of funds. She
further requested Rashmi to accept Rs 2,000 in cash and draw a new bill for the balance
including interest Rs 500. Rashmi accepted Alka’s request and drew a new bill for the amount
due payable after 2 months. The bill was accepted by Alka. The new bill was duly met by Alka
on maturity.
Record the necessary journal entries in the books of Rashmi and Alka and prepared
Alka’s account in the books of Rashmi’s and Rashmi’s account in the books of Alka’s.
Answer. Books of Rashmi
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Feb.14 Alka Dr. 7,500
To Sales A/c 7,500
(Goods sold to Alka)
Page 99
Feb.14 Cash A/c Dr. 500
Bills Receivable A/c Dr. 7,000
To Alka 7,500
(Cash received Rs 500 and the bill accepted by Alka)
Apr.10 Alka Dr. 7,000
To Bills Receivable A/c 7,000
(Alka got the bill cancelled)
Apr.10 Cash A/c Dr. 2,000
To Alka 2,000
(Received cash from Alka)
Apr.10 Alka Dr. 500
To Interest A/c 500
(Interest charged on the amount due from Alka)
Apr.10 Bills Receivable A/c Dr. 5,500
To Alka 5,500
(Alka's acceptance payable of two months received)
June 13 Cash A/c Dr. 5,500
To Bills Receivable A/c 5,500
(Alka's acceptance met on due date)
Bills Receivable A/c Dr. 7,000
To Alka 7,500
(Cash received Rs 500 and the bill accepted by Alka)
Apr.10 Alka Dr. 7,000
To Bills Receivable A/c 7,000
(Alka got the bill cancelled)
Apr.10 Cash A/c Dr. 2,000
To Alka 2,000
(Received cash from Alka)
Apr.10 Alka Dr. 500
To Interest A/c 500
(Interest charged on the amount due from Alka)
Apr.10 Bills Receivable A/c Dr. 5,500
To Alka 5,500
(Alka's acceptance payable of two months received)
June 13 Cash A/c Dr. 5,500
To Bills Receivable A/c 5,500
(Alka's acceptance met on due date)
Page 100
Ledger
Alka's Account
Dr. Cr.
Particular Amount Particular
Date s J.F. Rs Date s J.F. Amount Rs
2017 2017
Feb.14 Sales Feb.14 Cash
7,500 500
Bills Bills
Receiva Receiva
Apr.10 ble Feb.14 ble
7,000 7,000
Apr.10 Interest Apr.10 Cash
500 2,000
Bills
Receiva
Apr.10 ble
5,500
15,000 15,000
Books of Alka
Journal
Credit
Debit
Date Particulars L.F. Amount
Amount Rs
Rs
2017
Feb.14 Purchases A/c Dr. 7,500
To Rashmi 7,500
(Goods bought from Rahsmi)
Feb.14 Rashmi Dr. 7,500
To Cash A/c 500
To Bills Payable A/c 7,000
(Cash paid to Rashmi Rs 500 and a bill for Rs 7,000
Alka's Account
Dr. Cr.
Particular Amount Particular
Date s J.F. Rs Date s J.F. Amount Rs
2017 2017
Feb.14 Sales Feb.14 Cash
7,500 500
Bills Bills
Receiva Receiva
Apr.10 ble Feb.14 ble
7,000 7,000
Apr.10 Interest Apr.10 Cash
500 2,000
Bills
Receiva
Apr.10 ble
5,500
15,000 15,000
Books of Alka
Journal
Credit
Debit
Date Particulars L.F. Amount
Amount Rs
Rs
2017
Feb.14 Purchases A/c Dr. 7,500
To Rashmi 7,500
(Goods bought from Rahsmi)
Feb.14 Rashmi Dr. 7,500
To Cash A/c 500
To Bills Payable A/c 7,000
(Cash paid to Rashmi Rs 500 and a bill for Rs 7,000
Page 101
drawn by Rashmi accepted)
Apr.10 Bills Payable A/c Dr. 7,000
To Rashmi 7,000
(Bill cancelled before maturity)
Apr.10 Rashmi Dr. 2,000
To Cash A/c 2,000
(Cash paid to Rashmi)
Apr.10 Interest A/c Dr. 500
To Rashmi 500
(Interest due to Rashmi)
Apr.10 Rashmi Dr. 5,500
To Bills Payable A/c 5,500
(Rashmi's acceptance payable after two months
accepted)
June.13 Bills Payable A/c Dr. 5,500
To Cash A/c 5,500
(The bill met on due date)
Ledger
Rashmi’sAccount
Dr. Cr.
Apr.10 Bills Payable A/c Dr. 7,000
To Rashmi 7,000
(Bill cancelled before maturity)
Apr.10 Rashmi Dr. 2,000
To Cash A/c 2,000
(Cash paid to Rashmi)
Apr.10 Interest A/c Dr. 500
To Rashmi 500
(Interest due to Rashmi)
Apr.10 Rashmi Dr. 5,500
To Bills Payable A/c 5,500
(Rashmi's acceptance payable after two months
accepted)
June.13 Bills Payable A/c Dr. 5,500
To Cash A/c 5,500
(The bill met on due date)
Ledger
Rashmi’sAccount
Dr. Cr.
Page 102
Date Particulars J.F. Amount Rs Date Particulars J.F. Amount Rs
2017 2017
Purchase
Feb.14 Cash Feb.14 s
500 7,500
Bills Bills
Feb.14 Payable Apr.10 Payable
7,000 7,000
Apr.10 Cash Apr.10 Interest
2,000 500
Bills
Apr.10 Payable
5,500
15,000 15,000
Page : 315 , Block Name : Numerical Questions
Q20 Nikhil sold goods for Rs 23,000 to Akhil on Dec. 01, 2017. He drew upon Akhil a bill of
exchange for the same amount payable after 2 months. Akhil accepted the bill and sent it back
to Nikhil. Nikhil discounted the bill immediately with his bank @12 p.a. On the due date Akhil
dishonoured the bill of exchange and the bank paid Rs 100 as noting charges. Akhil requested
Nikhil to draw a new bill upon him with interest @10% p.a. which he agreed. The new bill was
payable after two months. A week before the maturity of the second bill Akhil requested Nikhil to
cancel the second bill. He further requested to accept Rs 10,000 in cash immediately and drew
a third bill upon him including interest of Rs 500. Nikhil agreed to Akhil’s request. The third bill
was payable after one month. Akhil met the third bill on its maturity. Record the necessary
journal entries in the books of Nikhil and Akhil and also prepare Akhil’s account in the books of
Nikhil and Nikhil’s account in the books of Akhil.
Answer. Books of Nikhil
Journal
Debit
Particular
Date L.F. Amount Credit Amount Rs
s
Rs
2017
Dec.01 Akhil Dr. 23,000
To Sales
A/c 23,000
(Goods
2017 2017
Purchase
Feb.14 Cash Feb.14 s
500 7,500
Bills Bills
Feb.14 Payable Apr.10 Payable
7,000 7,000
Apr.10 Cash Apr.10 Interest
2,000 500
Bills
Apr.10 Payable
5,500
15,000 15,000
Page : 315 , Block Name : Numerical Questions
Q20 Nikhil sold goods for Rs 23,000 to Akhil on Dec. 01, 2017. He drew upon Akhil a bill of
exchange for the same amount payable after 2 months. Akhil accepted the bill and sent it back
to Nikhil. Nikhil discounted the bill immediately with his bank @12 p.a. On the due date Akhil
dishonoured the bill of exchange and the bank paid Rs 100 as noting charges. Akhil requested
Nikhil to draw a new bill upon him with interest @10% p.a. which he agreed. The new bill was
payable after two months. A week before the maturity of the second bill Akhil requested Nikhil to
cancel the second bill. He further requested to accept Rs 10,000 in cash immediately and drew
a third bill upon him including interest of Rs 500. Nikhil agreed to Akhil’s request. The third bill
was payable after one month. Akhil met the third bill on its maturity. Record the necessary
journal entries in the books of Nikhil and Akhil and also prepare Akhil’s account in the books of
Nikhil and Nikhil’s account in the books of Akhil.
Answer. Books of Nikhil
Journal
Debit
Particular
Date L.F. Amount Credit Amount Rs
s
Rs
2017
Dec.01 Akhil Dr. 23,000
To Sales
A/c 23,000
(Goods
Page 103
sold to
Akhil)
Bills
Receiva
Dec.01 ble A/c Dr. 23,000
To Akhil 23,000
(Akhil's
accepta
nce
received
)
Bank
Dec.01 A/c Dr. 22,540
Discoun
t A/c Dr. 460
To Bills
Receivabl
e A/c 23,000
(Akhil's
accepta
nce
discount
ed at
12% p.a
with
bank)
2018
Feb.04 Akhil Dr. 23,100
To Bank
A/c 23,100
(Akhil's
accepta
nce
dishono
ured,
Akhil)
Bills
Receiva
Dec.01 ble A/c Dr. 23,000
To Akhil 23,000
(Akhil's
accepta
nce
received
)
Bank
Dec.01 A/c Dr. 22,540
Discoun
t A/c Dr. 460
To Bills
Receivabl
e A/c 23,000
(Akhil's
accepta
nce
discount
ed at
12% p.a
with
bank)
2018
Feb.04 Akhil Dr. 23,100
To Bank
A/c 23,100
(Akhil's
accepta
nce
dishono
ured,
Page 104
bank
paid
Rs 100
as
noting
charges
)
Feb.04 Akhil Dr. 385
To
Interest
A/c 385
(Interest
credited
on
account
of bill
dishono
ured
at 10%
p.a. for
two
months)
Bills
Receiva
Feb.04 ble A/c Dr. 23,485
To Akhil 23,485
(New
accepta
nce
received
from
Akhil for
next two
months
received
)
paid
Rs 100
as
noting
charges
)
Feb.04 Akhil Dr. 385
To
Interest
A/c 385
(Interest
credited
on
account
of bill
dishono
ured
at 10%
p.a. for
two
months)
Bills
Receiva
Feb.04 ble A/c Dr. 23,485
To Akhil 23,485
(New
accepta
nce
received
from
Akhil for
next two
months
received
)
Page 105
Apr.01 Akhil Dr. 23,485
To Bills
Receivabl
e A/c 23,485
(The
second
bill
cancelle
d
one wee
k before
maturity
)
Cash
Apr.01 A/c Dr. 10,000
To Akhil 10,000
(Cash
received
from
Akhil)
Apr.01 Akhil Dr. 500
To
Interest
A/c 500
(Interest
due
from
Akhil for
the bill)
Bills
Receiva
Apr.01 ble A/c Dr. 13,985
To Akhil 13,985
(Bill
To Bills
Receivabl
e A/c 23,485
(The
second
bill
cancelle
d
one wee
k before
maturity
)
Cash
Apr.01 A/c Dr. 10,000
To Akhil 10,000
(Cash
received
from
Akhil)
Apr.01 Akhil Dr. 500
To
Interest
A/c 500
(Interest
due
from
Akhil for
the bill)
Bills
Receiva
Apr.01 ble A/c Dr. 13,985
To Akhil 13,985
(Bill
Page 106
from
Akhil
received
)
Cash
May 04 A/c Dr. 13,985
To Bills
Receivabl
e A/c 13,985
(The
third bill
met on
due
date)
Akhil'sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
23,00
Dec.01 Sales 23,000 Dec.01 Bills Receivable 0
2018 2018
23,48
Feb.04 Bank 23,100 Feb.04 Bills Receivable 5
10,00
Feb.04 Interest 385 Apr.01 Cash 0
13,98
Apr.01 Bills Receivable 23,485 Apr.01 Bills Receivable 5
Apr.01 Interest 500
70,47
70,470 0
Akhil
received
)
Cash
May 04 A/c Dr. 13,985
To Bills
Receivabl
e A/c 13,985
(The
third bill
met on
due
date)
Akhil'sAccount
Dr. Cr.
Amount Amount
Date Particulars J.F. Rs Date Particulars J.F. Rs
2017 2017
23,00
Dec.01 Sales 23,000 Dec.01 Bills Receivable 0
2018 2018
23,48
Feb.04 Bank 23,100 Feb.04 Bills Receivable 5
10,00
Feb.04 Interest 385 Apr.01 Cash 0
13,98
Apr.01 Bills Receivable 23,485 Apr.01 Bills Receivable 5
Apr.01 Interest 500
70,47
70,470 0
Page 107
Books of Akhil
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Dec.01 Purchases A/c Dr. 23,000
To Nikhil 23,000
(Goods bought from Nikhil)
Dec.01 Nikhil Dr. 23,000
To Bills Payable A/c 23,000
(Bill drawn by Nikhil payable after two months
accepted)
2018
Feb.04 Bills Payable A/c Dr. 23,000
Noting Charges A/c Dr. 100
To Nikhil 23,100
(Bill dishonoured on due date and Rs 100 paid by
the holder of bill)
Feb.04 Interest A/c Dr. 385
To Nikhil A/c 385
(Interest due to Nikhil for the bill dishonoured)
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Dec.01 Purchases A/c Dr. 23,000
To Nikhil 23,000
(Goods bought from Nikhil)
Dec.01 Nikhil Dr. 23,000
To Bills Payable A/c 23,000
(Bill drawn by Nikhil payable after two months
accepted)
2018
Feb.04 Bills Payable A/c Dr. 23,000
Noting Charges A/c Dr. 100
To Nikhil 23,100
(Bill dishonoured on due date and Rs 100 paid by
the holder of bill)
Feb.04 Interest A/c Dr. 385
To Nikhil A/c 385
(Interest due to Nikhil for the bill dishonoured)
Page 108
Feb.04 Nikhil Dr. 23,485
To Bills Payable A/c 23,485
(New bill accepted payable after two months)
Apr.01 Bills Payable A/c Dr. 23,485
To Nikhil 23,485
(Bill cancelled before maturity)
Apr.01 Nikhil Dr. 10,000
To Cash A/c 10,000
(Cash paid to Nikhil)
Apr.01 Interest A/c Dr. 500
To Nikhil 500
(Interest due to Nikhil for bill cancellation)
Apr.01 Nikhil Dr. 13,985
To Bills Payable A/c 13,985
(New bill accepted payable after one month)
May 04 Bills Payable A/c Dr. 13,985
To Cash A/c 13,985
(The third bill met on maturity)
Nikhil Account
Dr. Cr.
To Bills Payable A/c 23,485
(New bill accepted payable after two months)
Apr.01 Bills Payable A/c Dr. 23,485
To Nikhil 23,485
(Bill cancelled before maturity)
Apr.01 Nikhil Dr. 10,000
To Cash A/c 10,000
(Cash paid to Nikhil)
Apr.01 Interest A/c Dr. 500
To Nikhil 500
(Interest due to Nikhil for bill cancellation)
Apr.01 Nikhil Dr. 13,985
To Bills Payable A/c 13,985
(New bill accepted payable after one month)
May 04 Bills Payable A/c Dr. 13,985
To Cash A/c 13,985
(The third bill met on maturity)
Nikhil Account
Dr. Cr.
Page 109
Date Particulars J.F. Amount Rs Date Particulars J.F. Amount Rs
2017 2017
Bills Purchase
Dec.01 Payable Dec.01 s
23,000 23,000
2018 2018
Bills Bills
Feb.04 Payable Feb.04 Payable
23,485 23,000
Noting
Apr.01 Cash Feb.04 Charge
10,000 100
Bills
Apr.01 Payable Feb.04 Interest
13,985 385
Bills
Apr.01 Payable
23,485
Apr.01 Interest
500
70,470 70,470
Page : 315 , Block Name : Numerical Questions
Q21 On Jan 01, 2017 Vibha sold goods worth Rs 18,000 to Sudha and drew upon the latter a
bill of exchange for the same amount payable after two months. Sudha accepted Vibha’s draft
and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour
of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel
the bill since she was short of funds. She further requested to draw a new bill upon her including
interest of Rs 200. Vibha accepted Sudha’s request. Vibha took the bill from Geeta by making
the payment to her in cash and cancelled the same. Then she drew a new bill upon Sudha as
agreed. The new bill was payable after one month. The new bill was duly met by Sudha on
maturity. Record the necessary journal entries in the books of Vibha.
Answer. Books of Vibha
Journal
Credit
Debit
Date Particulars L.F. Amount
Amount Rs
Rs
2017
Jan.01 Sudha Dr. 18,000
To Sales A/c 18,000
2017 2017
Bills Purchase
Dec.01 Payable Dec.01 s
23,000 23,000
2018 2018
Bills Bills
Feb.04 Payable Feb.04 Payable
23,485 23,000
Noting
Apr.01 Cash Feb.04 Charge
10,000 100
Bills
Apr.01 Payable Feb.04 Interest
13,985 385
Bills
Apr.01 Payable
23,485
Apr.01 Interest
500
70,470 70,470
Page : 315 , Block Name : Numerical Questions
Q21 On Jan 01, 2017 Vibha sold goods worth Rs 18,000 to Sudha and drew upon the latter a
bill of exchange for the same amount payable after two months. Sudha accepted Vibha’s draft
and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour
of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel
the bill since she was short of funds. She further requested to draw a new bill upon her including
interest of Rs 200. Vibha accepted Sudha’s request. Vibha took the bill from Geeta by making
the payment to her in cash and cancelled the same. Then she drew a new bill upon Sudha as
agreed. The new bill was payable after one month. The new bill was duly met by Sudha on
maturity. Record the necessary journal entries in the books of Vibha.
Answer. Books of Vibha
Journal
Credit
Debit
Date Particulars L.F. Amount
Amount Rs
Rs
2017
Jan.01 Sudha Dr. 18,000
To Sales A/c 18,000
Page 110
(Goods sold to Sudha)
Jan.01 Bills Receivable A/c Dr. 18,000
To Sudha 18,000
(Sudha's acceptance received)
Jan.01 Geeta Dr. 18,000
To Bills Receivable A/c 18,000
(Sudha's acceptance endorsed in favour of Geeta)
Feb.27 Sudha Dr. 18,000
To Geeta 18,000
(Sudha cancelled the bill five days before the maturity)
Feb.27 Geeta Dr. 18,000
To Cash A/c 18,000
(Cash paid to Geeta)
Feb.27 Sudha 200
To Interest A/c 200
(Interest credited to Sudha on account of
cancelling the bill )
Feb.27 Bills Receivable A/c Dr. 18,200
To Sudha 18,200
(New bill received from Sudha)
Jan.01 Bills Receivable A/c Dr. 18,000
To Sudha 18,000
(Sudha's acceptance received)
Jan.01 Geeta Dr. 18,000
To Bills Receivable A/c 18,000
(Sudha's acceptance endorsed in favour of Geeta)
Feb.27 Sudha Dr. 18,000
To Geeta 18,000
(Sudha cancelled the bill five days before the maturity)
Feb.27 Geeta Dr. 18,000
To Cash A/c 18,000
(Cash paid to Geeta)
Feb.27 Sudha 200
To Interest A/c 200
(Interest credited to Sudha on account of
cancelling the bill )
Feb.27 Bills Receivable A/c Dr. 18,200
To Sudha 18,200
(New bill received from Sudha)
Page 111
Mar.02 Cash A/c Dr. 18,200
To Sudha 18,200
(Shudha’s acceptance met on due date)
Page : 315 , Block Name : Numerical Questions
Q22 Following was the position of debtor and creditor of Gautam as on 1.1.2017.
Debtors Creditors
Rs Rs
Babu 5,000 –
Chanderkala 8,000 –
Kiran 13,500 –
Anita 14,000 –
Anju – 5,000
Sheiba – 12,000
Manju – 6,000
The following transactions took place in the month of Jan 2017:
Jan. 02 Drew on Babu at two months after date at full settlement for Rs 4,800. Babu
accepted the bill and returned it on 5.1.2017.
Jan. 04 Babu’s bill discounted for Rs 4,750.
Jan. 08 Chanderkala sent a promissory note for Rs 8,000 payable three months after date.
Jan. 10 Promissory note received from Chanderkala discounted for Rs 7,900
Jan. 12 Accepted Sheiba draft for the amount due payable two months after date.
Jan. 22 Anita sent his promissory note payable after two months.
Jan. 23 Anita’s promissory note endorsed in favour of Manju.
Jan. 25 Accepted Anju’s draft payable after three months.
Jan. 29 Kiran sent Rs 2,000 in cash and a promissory note for the balance payable after
To Sudha 18,200
(Shudha’s acceptance met on due date)
Page : 315 , Block Name : Numerical Questions
Q22 Following was the position of debtor and creditor of Gautam as on 1.1.2017.
Debtors Creditors
Rs Rs
Babu 5,000 –
Chanderkala 8,000 –
Kiran 13,500 –
Anita 14,000 –
Anju – 5,000
Sheiba – 12,000
Manju – 6,000
The following transactions took place in the month of Jan 2017:
Jan. 02 Drew on Babu at two months after date at full settlement for Rs 4,800. Babu
accepted the bill and returned it on 5.1.2017.
Jan. 04 Babu’s bill discounted for Rs 4,750.
Jan. 08 Chanderkala sent a promissory note for Rs 8,000 payable three months after date.
Jan. 10 Promissory note received from Chanderkala discounted for Rs 7,900
Jan. 12 Accepted Sheiba draft for the amount due payable two months after date.
Jan. 22 Anita sent his promissory note payable after two months.
Jan. 23 Anita’s promissory note endorsed in favour of Manju.
Jan. 25 Accepted Anju’s draft payable after three months.
Jan. 29 Kiran sent Rs 2,000 in cash and a promissory note for the balance payable after
Page 112
three months. Record the above transactions in the proper subsidiary books.
Answer. Bills Receivable Book
Drawer
Date of Date From Due Cash
whom Term Amount
No. Bill Received whom Acceptor Where date L.F. Book Remarks
receive Payable Rs
2017 2016 of Bill 2016 Folio
d
2
01 Jan.02 Jan.05 Babu Self Babu months Mar.05 4,800
Total 4,800
Bills Payable Book
Date of Due Cash
To Whom Where Amount Date
No. Bill Drawer Payee Term date Ledger Book Remarks
Given payable Rs paid
2017 2017 Folio
2
01 Jan.12 Sheiba Sheiba – months Mar.15 12,000
2
02 Jan.25 Anju Anju – months Apr.28 5,000
Total 17,000
Cash Book
Dr. Cr.
Answer. Bills Receivable Book
Drawer
Date of Date From Due Cash
whom Term Amount
No. Bill Received whom Acceptor Where date L.F. Book Remarks
receive Payable Rs
2017 2016 of Bill 2016 Folio
d
2
01 Jan.02 Jan.05 Babu Self Babu months Mar.05 4,800
Total 4,800
Bills Payable Book
Date of Due Cash
To Whom Where Amount Date
No. Bill Drawer Payee Term date Ledger Book Remarks
Given payable Rs paid
2017 2017 Folio
2
01 Jan.12 Sheiba Sheiba – months Mar.15 12,000
2
02 Jan.25 Anju Anju – months Apr.28 5,000
Total 17,000
Cash Book
Dr. Cr.
Page 113
Cash Bank Cash Bank
Date Particulars L.F. Rs Rs Date Particulars L.F. Rs Rs
2017 2017
Jan.04 Bills Receivable 4,750
Jan.10 Bills Receivable 7,900
Jan.29 Kiran 2,000 Jan.31 Balance c/d 2,000 12,650
2,000 12,650 2,000 12,650
There is difference between Bills of Exchange and Promissory Note. In case of Promissory
Note, parties are makers and payees. However, in Bills of Exchange parties are Drawer, drawee
(acceptor) and payee on account difference Promissory Note has not been recorded in Bills
Receivable and Bills Payable book.
Books of Gautam
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.05 Discount Allowed A/c Dr. 200
To Babu 200
(Babu's acceptance received and allowed him
discount Rs 200)
Jan.04 Discount A/c Dr. 50
To Bills Receivable A/c 50
(Babu's acceptance discounted with a discount
charge of Rs 50)
Date Particulars L.F. Rs Rs Date Particulars L.F. Rs Rs
2017 2017
Jan.04 Bills Receivable 4,750
Jan.10 Bills Receivable 7,900
Jan.29 Kiran 2,000 Jan.31 Balance c/d 2,000 12,650
2,000 12,650 2,000 12,650
There is difference between Bills of Exchange and Promissory Note. In case of Promissory
Note, parties are makers and payees. However, in Bills of Exchange parties are Drawer, drawee
(acceptor) and payee on account difference Promissory Note has not been recorded in Bills
Receivable and Bills Payable book.
Books of Gautam
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.05 Discount Allowed A/c Dr. 200
To Babu 200
(Babu's acceptance received and allowed him
discount Rs 200)
Jan.04 Discount A/c Dr. 50
To Bills Receivable A/c 50
(Babu's acceptance discounted with a discount
charge of Rs 50)
Page 114
Jan.08 Bills Receivable A/c Dr. 8,000
To Chanderkala 8,000
(Promissory Note from Chanderkala received)
Jan.10 Discount A/c Dr. 100
To Bills Receivable A/c 100
(Chanderkala's Promissory Note discounted with bank
at discount of Rs 100)
Jan.22 Bills Receivable A/c Dr. 14,000
To Anita 14,000
(Promissory Note received from Anita)
Jan.23 Manju Dr. 14,000
To Bills Receivable A/c 14,000
(Anita's Promissory Note endorsed to Manju)
Jan.29 Bills Receivable A/c Dr. 11,500
To Kiran 11,500
(Promissory Note from Kiran received)
Page : 315 , Block Name : Numerical Questions
Q23 On Jan. 01, 2017 Harsh accepted a month bill for Rs 10,000 drawn on him by tanu for
latter’s benefit. Tanu discounted the bill on same day @ 8% p.a. On the due date tanu sent a
cheque to Harsh for honour the bill. Harsh duly honoured his acceptance. Record the journal
entries in the Books of Tanu and Harsh.
Answer. Books of Tanu
To Chanderkala 8,000
(Promissory Note from Chanderkala received)
Jan.10 Discount A/c Dr. 100
To Bills Receivable A/c 100
(Chanderkala's Promissory Note discounted with bank
at discount of Rs 100)
Jan.22 Bills Receivable A/c Dr. 14,000
To Anita 14,000
(Promissory Note received from Anita)
Jan.23 Manju Dr. 14,000
To Bills Receivable A/c 14,000
(Anita's Promissory Note endorsed to Manju)
Jan.29 Bills Receivable A/c Dr. 11,500
To Kiran 11,500
(Promissory Note from Kiran received)
Page : 315 , Block Name : Numerical Questions
Q23 On Jan. 01, 2017 Harsh accepted a month bill for Rs 10,000 drawn on him by tanu for
latter’s benefit. Tanu discounted the bill on same day @ 8% p.a. On the due date tanu sent a
cheque to Harsh for honour the bill. Harsh duly honoured his acceptance. Record the journal
entries in the Books of Tanu and Harsh.
Answer. Books of Tanu
Page 115
Journal
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2017
Bills
Receivabl
Jan.01 e A/c Dr. 10,000
To Harsh 10,000
(Harsh's
acceptan
ce
received)
Jan.01 Bank A/c Dr. 9,933
Discount
A/c 67
To Bills
Receivable
A/c 10,000
(Harsh's
acceptan
ce
discounte
d at
8% p.a.
for one
month)
Feb.04 Harsha Dr. 10,000
To Bank
A/c 10,000
(Harsh's
account
settled by
paying
amount
Debit
Date Particulars L.F. Credit Amount Rs
Amount Rs
2017
Bills
Receivabl
Jan.01 e A/c Dr. 10,000
To Harsh 10,000
(Harsh's
acceptan
ce
received)
Jan.01 Bank A/c Dr. 9,933
Discount
A/c 67
To Bills
Receivable
A/c 10,000
(Harsh's
acceptan
ce
discounte
d at
8% p.a.
for one
month)
Feb.04 Harsha Dr. 10,000
To Bank
A/c 10,000
(Harsh's
account
settled by
paying
amount
Page 116
due to
Harsh
through
cheque)
Books of Harsh
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.01 Tanu Dr. 10,000
To Bills Payable A/c 10,000
(Bill drawn by Tanu accepted)
Feb.04 Bank A/c Dr. 10,000
To Tanu 10,000
(Cheque received from Tanu)
Feb.04 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Bill drawn by Tanu met on due date)
Page : 316 , Block Name : Numerical Questions
Harsh
through
cheque)
Books of Harsh
Journal
Debit Credit
Date Particulars L.F. Amount Amount
Rs Rs
2017
Jan.01 Tanu Dr. 10,000
To Bills Payable A/c 10,000
(Bill drawn by Tanu accepted)
Feb.04 Bank A/c Dr. 10,000
To Tanu 10,000
(Cheque received from Tanu)
Feb.04 Bills Payable A/c Dr. 10,000
To Bank A/c 10,000
(Bill drawn by Tanu met on due date)
Page : 316 , Block Name : Numerical Questions
Document Details
| Board / Org | NCERT |
| Exam | Class 11 |
| Type | Solution |
| Pages | 116 |
| Updated | 22 Jul 2026 |