Question

when bill is dishonored ___________ account is Debited along with Bill payable A/c for recording noting charges.

• A. Noting Charges A/c
• B. Cash A/c
• C. Drawer A/c
• D. None

Answer 1

Answer: (A)

Noting Charges A/c

When a Bill of Exchange is dishonoured, in order to prove the fact, the drawer (or holder) may get the bill of exchange noted and protested through a public official known as “Notary Public” Noting is the recording of the fact of dishonour by a Notary public which becomes an evidence of dishonour.

Journal Entry :-

Noting Charges A/c Dr.

To Bills Payable A/c.