When the holder of the bill discounts the bill, he shall debit ____________.

Bank Account

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Bills receivable Account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Acceptor's Account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Cash Account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A Bank Account
If the holder of the bill needs funds, he can approach the bank for encashment of the bill before the due date. The bank shall make the payment of the bill after deducting some interest. This process of encashing the bill with the bank is called discounting the bill whereby the holder of the bill gets money from the bank. While passing journal entry for discounting the bill the bank account is debited. The bank then recovers the amount from the drawee on the due date.

Suggest Corrections

Similar questions

Q. When Consignor discounts the bills receivable with bank, then which of the following entry will be passed in the books of Consignor?

A.Consignment A/c Discount A/c To Bills Receivable A/c	Dr. Dr.
A.Bank A/c Profit & Loss A/c To Bills Receivable A/c	Dr. Dr.
C.Bank A/c Consignment A/c To Bills Receivable A/c	Dr. Dr.
D.None of the above.

P draws a bill for Rs 2,000 on Q who accepts and returns it to P on the same date. P sent the bill to his banker for collection. On the due date the bill is dishonoured by Q. Which account shall be debited in drawer`s books?

Q. Bank account is debited when a bill is sent to the bank for collection.

Q. Discount charges of Rs.1,000 on discounting a Bill Receivable accepted by consignee are debited to:

Q. When a bill is discharged, the receiver debits ___________.

Join BYJU'S Learning Program