Question

When a bill is discharged, the receiver debits ___________.

• A. creditor's A/c
• B. cash A/c
• C. bills payable A/c
• D. drawer's A/c

Answer 1

Answer: (C)

bills payable A/c

The bill is discharged by the receiver ( drawee) , means that the he has paid his liability towards the drawer which was outstanding in his books. Now we know that a liability account would show a credit balance so, if we were to clear the same we would have to debit it. The entry for the same in his books of accounts would be as follows :

Bills payable A/c. -----------------Dr.

To Cash/Bank A/c.