No cancellation entry is required when a bill is renewed.

True

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False

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Solution

The correct option is B False
In this case, a new bill will be for the remaining amount. Interest will then be charged on the remaining amount for the extended period of credit.
First main entry is made to cancel the old bill.

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Similar questions

Cancelling an old bill and drawing a new bill is called renewal of a bill. Do you agree?

No entry is required when a ___ accepts a fixed asset in payment of his dues.

The cancellation of the old bill maturity in return for a new bill (which includes interest) for an extended period is called ________________.

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