Similar to accounts payable, Bills Payable is used to describe a bank’s gratitude to other banks, principally a Federal Reserve Bank, that is backed by guarantee consisting of the bank’s promissory note and a pledge of government securities. In other words, bills payable is the money a bank borrows, mainly on a short-term basis, and owes to other banks.
Retiring of a Bill of Exchange: Learning Objectives: Make journal entries in the books of drawer and drawee when a bill of exchange is retired before it maturity. Definition and Explanation: Retiring a bill means making payment before the date of maturity. When the
Recording Transactions of Bill of Exchange: For the purpose of accounting, bills are classified under two heads: Bills receivable Bills payable Bills Receivable: A bill of exchange is treated as a bill receivable by one who is entitled to receive the sum due on
Conversion into Double Entry System: Learning Objectives: Define and explain conversion method. How trading and profit and loss account and balance sheet is prepared under conversion method. Conversion of books from single entry system to double entry system is possible either with retrospective (i.e.,
Bills Payable Book: Learning Objectives: Define and explain bills payable book. Prepare a bills payable book and post into ledger. Definition and Explanation: Bills payable book is used to record bill accepted by us. When a bill drawn by our creditor is accepted particulars