Question

On dishonour of a bill discounted the drawer gives credit to ________.

• A. Drawee A/c
• B. Noting charges A/c
• C. Bills receivable A/c
• D. Bank A/c

Answer 1

Answer: (A)

Drawee A/c

When a bill of exchange discounted with a bank gets dishonoured at the due date, in that case, the following entry is recorded. L.F. This entry implies that on dishonour the drawee again becomes the debtor of the drawer and bank becomes the creditor of the drawer (due to non-payment by drawee on due date)