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Retiring the Bill

A retires a b...

Question

A retires a bill for Rs. 1000 drawn on him by B for rebate of Rs. 10. By what cash amount should be credited in the books of B?

A

Rs. 990

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B

Rs. 995

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C

Rs. 1,000

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D

Rs. 1,010

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Solution

The correct option is A
Rs. 990

Journal entry in the books of B:

Bills Payable A/c Dr. 1,000

To Cash A/c 990

To Rebate on Bills A/c 10

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