Bills Payable Book

Learning Objectives:

1. Define and explain bills payable book.
2. Prepare a bills payable book and post into ledger.

Definition and Explanation:

Bills payable book is used to record bill accepted by us. When a bill drawn by our creditor is accepted particulars of the same are recorded in this book.

Posting:

In the ledger, the account of each person whose bill has been accepted is debited with the amount of the bill. The monthly total of the bills accepted is credited to the bills payable account ledger.

Format of Bills Receivable Book:

The following is the ruling and format of bills payable book:

(1) Bills Payable Book

Date	To whom given	Drawer	Payee	Where payable	Term	Due date	L.F.	Amount	Remarks

(2) Bills Payable Book

Date	To whom given	Term	Due date	L.F.	Amount

Example:

From the following transactions of a trader prepare the bills payable book and post it into ledger:-

1991
January 5	Accepted a bill at 3 m/d for $200 drawn by Rahmat & Co.
" 20	gave acceptance at 2 m/d for $500 to Kamal.
" 30	Acceptance at 1 m/d for $ 500 given to Feroz & Co.

Solution:

Bills Payable Book

Date	Particulars	Term	Due Date	L.F.	Amount
1991 Jan. 5 " 20 " 30	Rahmat & Co. Kamal Feroz & Co.	3 m/d 2 m/d 1 m/d	April 8 March 23 " 30		$ 200 500 500
					1,200

Bills Payable Account

1991 Jan. 31

By Sundries as per B/p Book

$ 1,200

Rahmat & Co.

1991 Jan. 5

By Bill Payable

$ 200

Kamal

1991 Jan. 20

By Bill Payable

$ 500

Feroz & Co.

1991 Jan. 31

By Bill Payable

$ 500