Question

On meeting the bill on the due date, the entry is

• A. Bills Payable Account , Cash Book
• B. Cash Book , Bills Payable Account
• C. Bills Receivable Book , Cash Book
• D. Cash Book , Bills Receivable Book

Answer 1

Answer:

A. Bills Payable Account , Cash Book

When a bill payable is honored, liability decreases (Bills Payable debited) and cash goes out (Cash credited).