Q.A trader accepts bills receivable from customers. From the following information, find the amount of Bills Receivable received (drawn) during the year by preparing a Bills Receivable Account: Opening Bills Receivable (1.4.2022) ₹15,000; Bills collected (honoured) during the year ₹40,000; Bills dishonoured during the year ₹5,000; Closing Bills Receivable (31.3.2023) ₹20,000.

Bills received during the year is the unknown debit-side item in the Bills Receivable Account, so it is found once the collected, dishonoured, and closing figures are entered on the credit side.

Bills Receivable Account for the year ended 31.3.2023

Working: …

Note that when a bill is dishonoured, the amount moves back out of Bills Receivable and is credited there, while simultaneously being debited back to the Total Debtors Account (since the customer's debt is res …

Students sometimes forget to include dishonoured bills at all, treating the account as if every bill drawn during the year were eventually collected in cash. Dishonoured bills must be shown on the credit side of the Bills Receivabl …