Explain briefly the purpose and advantages of maintaining a Bills Receivable Book?
Explain briefly the purpose and advantages of maintaining a Bills Receivable Book?
A Bills Receivable Book is designed as a summary of information regarding a duly accepted bill received by a drawer. It contains almost all the details of the bill like bill date, acceptor's name, amount, term, place of payment etc for future reference.
The advantage of preparing the Bills Receivable Book is that we get all the information at a glance. Moreover, we can get an overall idea about our Debtors and keep our collection system smooth and up to date. A Bill Receivable Book contains a number of transaction related to the bills, e.g., related to bills discounted, endorsement, retirement, renewal etc.
The bills receivable book, like any other subsidiary book, is totalled periodically. This total is debited to the 'Bills Receivable Account' whereas the account of every individual debtor whom the bills received is credited in the ledger. The Bills Receivable Account is the account of an asset and would always have a debit balance.
A Bills Receivable Book is designed as a summary of information regarding a duly accepted bill received by a drawer. It contains almost all the details of the bill like bill date, acceptor's name, amount, term, place of payment etc for future reference.
The advantage of preparing the Bills Receivable Book is that we get all the information at a glance. Moreover, we can get an overall idea about our Debtors and keep our collection system smooth and up to date. A Bill Receivable Book contains a number of transaction related to the bills, e.g., related to bills discounted, endorsement, retirement, renewal etc.
The bills receivable book, like any other subsidiary book, is totalled periodically. This total is debited to the 'Bills Receivable Account' whereas the account of every individual debtor whom the bills received is credited in the ledger. The Bills Receivable Account is the account of an asset and would always have a debit balance.
