Q.Briefly explain the benefits of maintaining a Bills Payable Book and state how its posting is done in the ledger.

The Bills Payable Book records all bills accepted in one place and is posted with its total to the credit of the Bills Payable Account, each drawer being debited. …

The Bills Payable Book is a subsidiary book recording the details of every bill of exchange and promissory note the business accepts — the drawer (creditor), date of the bill, term, due date and amount.

Benefits:

• It saves time by avoiding a separate journal entry for each accepted bill.
• It keeps a complete, up-to-date record of the firm's acceptances (a liability) and their due dates, so it can arrange funds to meet them.

Posting in the ledger: …