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BILLS RECEIVABLE AND BILLS PAYABLE BOOKS

When the payments for a business transactions is not made immediately but is postponed for a few months, a bill of exchange payable some time in future may be drawn by the creditor (seller) on  his debtor (Purchase). The bill of exchange is then accepted by the debtor indicating that he would pay the amount specified therein on the expiry of the period state on the bill. To the creditor, who draws the bill upon his customer, it is termed as Bills Receivable representing money to be received at a future date; to the debtor, the bill on acceptance becomes a Bills Payable indicating that the money has to be paid at a future date. Transaction involving the drawing, the acceptance and negotiation of bills are recorded in Bills Receivable and Bills Payable Books respectively.

BILLS RECEIVABLE BOOK

This book of original entry is used to record the details of bills receivable on which the business enterprise will receive the amounts from other parties in future. The entries to be made in this book include the name of the acceptor (debtor), the terms, due date, the amount and other details.

Serial No. Date of Receipt From Whom Received L.F Period Due Date Amount Rs.
1.
2.
3.
March 2
March 5
April 1   
Ron Lara
Raven Lara
Victor Publishing Co.   
  3 Months
4 Months
4 Months
May29
June 5
July 23   

1,000
800
1,500

3,300

BILLS PAYABLE BOOK

This is also a book of original entry and is used to record the particulars of all the ‘bills payable’ accepted by the business enterprise for the purpose of paying at a future date the amount due by it (the business enterprise or trader) to its or his creditors. The entries to be made in this book relate to the name of the drawer, the name of the payee, the period, the due date, and other particulars. Then the acceptance is duly returned to the drawer.

Serial No.
Date of Receipt
From Whom Received L.F
Period
Due Date
Amount Rs.
1.
2.
3.
June 4
June 6
July 8   
Arnold
Ronal do
Peter Parker

3 Months
4 Months
3 Months
Sept.5
Oct.7
  Oct.9  

1,200
1,400
2,000

4,600

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