Numerical Questions · Q14
Q.Abdulla sold goods to Tahir on Jan 17, 2017 for ₹18,000. He drew a bill of exchange for the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla paid ₹40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of ₹18,700 including interest and noting charges. Record the necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir's account in the books of Abdulla and Abdulla's account in the books of Tahir.
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Start your 14-day free trial to unlock the full solution →Bill dated Jan 17, 2017 for 45 days ⇒ maturity = March 06, 2017 (Jan 17 + 45 days = Mar 03, + 3 days of grace). The bill was retained and dishonoured; Abdulla paid ₹40 noting charges, so Tahir owes ₹18,000 + ₹40 = ₹18,040. Settlement five days after dishonour (Mar 11) is ₹18,700 including noting and interest ⇒ interest = ₹18,700 − ₹18,040 = ₹660.
In the Books of Abdulla — Journal
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 2017 Jan. 17 | Tahir's A/c Dr. | 18,000 | ||
| To Sales A/c | 18,000 | |||
| 2017 Jan. 17 | Bills Receivable A/c Dr. | 18,000 | ||
| To Tahir's A/c | 18,000 | |||
| 2017 Mar. 06 | Tahir's A/c Dr. | 18,040 | ||
| To Bills Receivable A/c | 18,000 | |||
| To Cash A/c | 40 | |||
| 2017 Mar. 11 | Tahir's A/c Dr. | 660 | ||
| To Interest A/c | 660 | |||
| 2017 Mar. 11 | Cash/Bank A/c Dr. | 18,700 | ||
| To Tahir's A/c | 18,700 |
In the Books of Tahir — Journal
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 2017 Jan. 17 | Purchases A/c Dr. | 18,000 | ||
| To Abdulla's A/c | 18,000 | |||
| 2017 Jan. 17 | Abdulla's A/c Dr. | 18,000 | ||
| To Bills Payable A/c | 18,000 | |||
| 2017 Mar. 06 | Bills Payable A/c Dr. | 18,000 | ||
| Noting Charges A/c Dr. | 40 | |||
| To Abdulla's A/c | 18,040 | |||
| 2017 Mar. 11 | Interest A/c Dr. | 660 | ||
| To Abdulla's A/c | 660 | |||
| 2017 Mar. 11 | Abdulla's A/c Dr. | 18,700 | ||
| To Cash/Bank A/c | 18,700 |
Tahir's Account (in the Books of Abdulla)
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) |
|---|---|---|---|---|---|---|---|
| 2017 Jan. 17 | To Sales A/c | 18,000 | 2017 Jan. 17 | By Bills Receivable A/c | 18,000 | ||
| 2017 Mar. 06 | To Bills Receivable A/c | 18,000 | 2017 Mar. 11 | By Cash/Bank A/c | 18,700 | ||
| 2017 Mar. 06 | To Cash A/c (noting) | 40 |
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