Home > Topics > Financial Accounting II > Accounting in Acceptor's Books

Accounting in Acceptor's Books (Buyer) 🧾

The Acceptor (Drawee) is the person who has to pay (Liability). We call it Bills Payable (B/P).

Standard Journal Entries 📝

1. When Goods are Purchased

Purchases A/c  ...Dr.
    To Drawer A/c
(Being goods purchased on credit)

2. When Bill is Accepted

Drawer A/c  ...Dr.
    To Bills Payable A/c
(Being acceptance given)

3. On Due Date (When Payment is Made)

Bills Payable A/c  ...Dr.
    To Cash / Bank A/c
(Being bill met on due date)
Why debit Drawer?

In Entry 2, we debit the Drawer because we don't owe him personally anymore. We owe the Bill. The liability shifts from "Person" to "Paper".

Example 🍎

Simran buys goods from Raj for ₹10,000. Accepts bill. Pays on due date.

In Simran's Books:

  1. Purchases Dr. 10,000 | To Raj 10,000
  2. Raj Dr. 10,000 | To B/P A/c 10,000
  3. B/P A/c Dr. 10,000 | To Cash 10,000

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. For the Acceptor, the bill is a:

Asset
Liability (Bills Payable)
Income
Expense

💡 Final Wisdom: "For the Buyer, signing the bill is like signing a cheque for the future. You better have the money ready when the date comes!" 📅

Next up: Honour of a Bill - What happens when everything goes right? ✅

← PreviousNext →