A bill for Rs 700 RETIRED by bank under a rebate of Rs 20, the full amount of - Accountancy - Bank Reconciliation Statement

Question

A bill for Rs 700 RETIRED by bank under a rebate of Rs 20, the
full amount of the bill was credited in the cash book
WHAT IS THE MEANING OF THIS LINE?

Jayati Jawa · Accepted Answer

Dear Student,
In case of bill of exchange, when a bill is paid off before the
due date, some discount (known as rebate) is received, therefore,
less amount is paid
For example, if a bill payable is to be discharged on 31 Mar 2014
while the debtor paid the due amount on Mar 01 2014 only, he is
entitled to discount of some percentage

Here, in Cash Book, Bill payable was credited with full amount of
Rs 700 whereas actually it should be credited with Rs 680 onlly (i
e 700 - 20)

So, accordingly, Rs 20 will be added to the balance as per Cash
Book in order to rectify the mistake

Hope this answers your query
Keep posting!!

A bill for Rs. 700 RETIRED by bank under a rebate of Rs. 20, the full amount of the bill was credited in the cash book. WHAT IS THE MEANING OF THIS LINE?

A bill for Rs. 700 RETIRED by bank under a rebate of Rs. 20, the full amount of the bill was credited in the cash book.

WHAT IS THE MEANING OF THIS LINE?