Bills Payable Book
When we buy goods on credit, the supplier may ask us to sign a bill. For the buyer (us), it is a Bill Payable (B/P) because we have to pay money.
Purpose
To record all Bills Payable accepted by us given to our creditors.
Format of Bills Payable Book
| No. of Bill | Date of Bill | To Whom Given | Drawer | Payee | Where Payable | Term | Due Date | L.F. | Amount (₹) | Remarks |
|---|---|---|---|---|---|---|---|---|---|---|
Solved Example
Record in B/P Book:
- Apr 10: Accepted a bill drawn by LG Electronics for ₹20,000, payable after 1 month.
- Apr 20: Gave acceptance to Sony India for ₹15,000, payable after 2 months.
Solution: Bills Payable Book
| No. | Date | To Whom Given | Term | Due Date | L.F. | Amount (₹) |
|---|---|---|---|---|---|---|
| 1 | Apr 10 | LG Electronics | 1m | May 13 | 20,000 | |
| 2 | Apr 20 | Sony India | 2m | Jun 23 | 15,000 | |
| Total | 35,000 |
Note on Due Date:
- LG: Apr 10 + 1 month = May 10 + 3 days grace = May 13
- Sony: Apr 20 + 2 months = Jun 20 + 3 days grace = Jun 23
Ledger Posting
-
Supplier Accounts:
- Debit individual supplier accounts.
- Entry: "To Bills Payable A/c".
-
Bills Payable Account:
- Credit the B/P Account with the Total at month-end.
- Entry: "By Sundries as per B/P Book".
Quiz
Test Your Knowledge
Question 1 of 4
1. Bills Payable Book records:
💡 Final Wisdom: "Bills Payable are liabilities. Treat them with respect and pay them on time to keep your credit score high!"