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What is discharge of bills. Tell the treatment in accounting equation, journal, cash book and BRS


Dear Student,

Discharge of Bills refers to payment of the Bills payable or discharge of our liability towards the payment of "Bills accepted".

Say for example, Mr A discharged Bills of Rs 10,000. Treatment would be as follows: 

a) In Accounting Equation : Cash Balance would be reduced & Creditors for Bills would be reduced.
 
S. No. Transaction Assets = Liabilities + Capital
Cash + Bank + Stock + Furniture + Motor Cycle = Creditors + Outstanding Rent    
(i)  Discharge of Bills   (10,000)                    (10,000)        

b) In Journal:
 
Journal
Date Particulars L.F. Debit
Amount
(Rs)		 Credit
Amount
(Rs)
  Bills Payable A/c Dr.   10,000  
    To Cash A/c       10,000
  (Being Bills discharged)        

c) In Cash Book:
 
Cash Book
Dr. Cr.
Date Particulars L.F. Cash
(Rs)		 Date Particulars L.F. Cash
(Rs)
           By Bills Payables A/c    10,000
               

d) No Entry in BRS as it does not involve Bank A/c . Moreover, if the payment would have been made from Bank A/c then also it would fall in BRS only when something has been missed either from Cash Book or Pass book.

Regards,
 

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View Full Answer
when bank gives the bill to the acceptor for collecting the amount it is known as discharge of bills.

 
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Discharge of bill means payment of bills payable. In accounting equation minus grom cash and minus from bills payable. In journal Bills Payable a/c dr to Cash a/c. In cash book credit side by bills payable a/c
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