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Accommodation Bills – Helping a Friend! 🤝

Scenario:

  • Ram needs money. Shyam also needs money.
  • They don't buy/sell any goods.
  • Ram draws a dummy bill on Shyam. Shyam accepts it.
  • Ram discounts it with the Bank and gets cash.
  • Ram shares the cash with Shyam.
  • On due date, they both contribute and pay the Bank.

Definition: A bill drawn and accepted without any consideration (no goods sold), just to help one or both parties raise funds temporarily. Also known as "Kite Flying".

Key Features 🌟

  1. No Trade: No Purchase/Sale entry.
  2. Mutual Help: Done to accommodate financial needs.
  3. Sharing: Proceeds and Discount charges are shared in an agreed ratio.
  4. Bad Debt Risk: If one party fails to pay their share on due date, the other party is in big trouble!
1. Draw Bill"Ram draws, Shyam accepts. (No Goods)"
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2. Discount"Ram gets cash from Bank."
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3. Share"Ram sends 50% cash to Shyam."
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4. Due Date"Ram sends his 50% to Shyam. Shyam pays full to Bank."

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. Accommodation Bill is drawn for:

Sale of goods
Mutual financial help
Paying tax
None

💡 Final Wisdom: "Accommodation Bills are risky. If your friend runs away with the cash, you are left holding the bag (and the liability)!" 🏃‍♂️💨

Next up: Practical Problems - Let's solve a full sum! 🧮

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