What do you mean by ,"A bill for Rs.700 retired by bank under a rebate of Rs.20, the full amount of the bill was credited in Cash Book." And what will be the effect of the same transaction in BRS when given Dr. cash balance?
Dear Student,
Bill retired under Rebate refers to the situation wherein the bill is paid off before the maturity date and due to which a sort of discount called rebate is allowed. So, when it is said that ,"A bill for Rs.700 retired by bank under a rebate of Rs.20, the full amount of the bill was credited in Cash Book" , it means that actual bill amounting to Rs. 700 was paid off through Bank A/c at Rs 680 getting rebate of Rs 20 but the amount credited in cash book was Rs 700.
It implies that cash book has been deducted by Rs 20 more as compared to pass book and so when BRS as per cash book would be prepared, Rs 20 would be added or shown under plus column of BRS, so as to match up with the balance of Pass Book.
Regards,
Bill retired under Rebate refers to the situation wherein the bill is paid off before the maturity date and due to which a sort of discount called rebate is allowed. So, when it is said that ,"A bill for Rs.700 retired by bank under a rebate of Rs.20, the full amount of the bill was credited in Cash Book" , it means that actual bill amounting to Rs. 700 was paid off through Bank A/c at Rs 680 getting rebate of Rs 20 but the amount credited in cash book was Rs 700.
It implies that cash book has been deducted by Rs 20 more as compared to pass book and so when BRS as per cash book would be prepared, Rs 20 would be added or shown under plus column of BRS, so as to match up with the balance of Pass Book.
Regards,