Question

When the bill of exchange drawn by the Consignor is accepted by the Consignee which account will be credited in the books of the consignor?

• A. Consignment A/c
• B. Consignee's A/c
• C. Bills Receivable A/c
• D. Bills payable A/c

Answer 1

The correct option is B Consignee's A/c

When the bill of exchange drawn by the consignor is accepted by the consignee, the consignee's account is credited in the books of the consignor. This is because the consignee is a debtor in the books of the consignor as the consignee is liable to pay the proceeds from sale of goods sent on consignment to the consignor. So, when the consignee accepts the bill of exchange, he has indirectly made payment to the consignor in the form of bill of exchange in place of cash or bank account and thus, his account will be credited against the balance receivable.