Read the following Paragraphs and answer the following Questions Teamwise

Bills Payable: A bill payable is a document which shows the amount owed for goods or services received on credit. Examples of a bill payable include a monthly telephone bill, electricity bill, a bill for repairs or maintenance, the bill for merchandise purchased by a retailer on credit, etc. The provider of the goods or services is referred to as the supplier or vendor. Hence, the bill payable is also known as an unpaid vendor invoice.
Under the accrual method of accounting or bookkeeping, a bill payable or unpaid vendor invoice is recorded in Accounts Payable with a credit entry. When the bill is paid, Accounts Payable will be reduced with a debit entry. The credit balance in Accounts Payable is reported on the company's balance sheet as a current liability.

Bill, Dishonoured: What happens when a bill is not honored by the acceptor on the due date (cash is not paid to the holder of the bill)? A bill of exchange is said to be dishonored when its acceptor refuses to pay the amount of the bill to the holder of the bill on its maturity. The bill then becomes useless and the party from whom it has been received will be liable to pay for the amount. It is very important to know that, when a bill is dishonored, in whose possession it was? Because when a bill is dishonored, all the parties involved are effected and books of accounts of all the parties have to be adjusted. For example, A draws a bill of $5,000 on B and B accepts it and returns it to A. A retains the bill in his possession till the due date. On the due date the bill is not honored by the acceptor. We can see, there are two parties involved whose books are to be adjusted. If suppose, A has discounted or endorsed the bill, then there are three parties involved and books of accounts of all the parties are effected.

Bill, Maturity Of A: In calculating the date at which a promissory note or bill of exchange, made payable a stated number of months after date or after sight, or after a certain event, is at maturity, the period stated shall be held to terminate on the day of the month which corresponds with the day on which the instrument is dated, or presented for acceptance or sight, or noted for non-acceptance, or protested for non-acceptance, or the event happens, or, where the instrument is a bill of exchange made payable a stated number of months after sight and has been accepted for honour, with the day on which it was so accepted. If the month in which the period would terminate has no corresponding day, the period shall be held to terminate on the last day of such month.

Bill of exchange: A bill of exchange is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.

(Start Quiz) Team 1

Country Wise Quizzes:

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Subject Wise Quizzes:

Anthropology Sociology Psychology Economics Political Science Geography Environmental Science Physics Chemistry Botany Zoology Agriculture Commerce Geology

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