Book-Keeping and Accountancy · Ch 7 — Bills of Exchange
Retaining the Bill till Maturity and Its Honour
6
Retaining the Bill till Maturity and Its Honour
The simplest course of action for a drawer holding an accepted bill is to do nothing with it — simply retain it until its due date and then present it to the drawee for payment. If the drawee pays the full amount on presentation, the bill is said to be honoured.
In the books of the Drawer, on the due date, when the bill is honoured:
| Particulars | Debit | Credit |
|---|---|---|
| Bank/Cash A/c ......Dr | Bill amount | |
| To Bills Receivable A/c | Bill amount |
In the books of the Drawee (Acceptor), on the due date, when the bill is honoured:
| Particulars | Debit | Credit |
|---|---|---|
| Bills Payable A/c ......Dr | Bill amount | |
| To Bank/Cash A/c | Bill amount |
Definition 1Honour of a bill
Payment of the full bill amount by the drawee (acceptor) to the holder on the due date, exactly as …
Definition 2Holder
The person currently entitled to a bill's payment on the due date — the drawer if retained, or a bank/endorsee if the bill has been discounted, sent f …