Question

At the time of endorsement of a bill, the drawer credits ___________________.

• A. The drawee
• B. Endorse personal account
• C. Bills receivable account
• D. Bills for collection account

Answer 1

The correct option is C Bills receivable account

Any holder may transfer a bill unless its transfer is restricted, i.e. the bill has been negotiated containing words prohibiting its transfer. The bill can be initially endorsed by the drawer by putting his signatures at the back of the bill along with the name of the party to whom it is being transferred. The act of signing and transferring the bill is called endorsement. the journal entry for endorsement is:

Endorsee A/c Dr.

To Bills receivable A/c