Accounting Mcqs

Q.  When bill discounted with the bank is dishonored?

a. Acceptor‘s Account is debited in the books of drawer
b. Bills Receivable Account is credited in the books of drawer
c. Bank Account is debited in the books of drawer
d. Bills Payable Account is debited in the books of drawer


ANSWER: See Answer
 
When a bill discounted with bank has been dishonoured, the drawer debits the Acceptors Account (restores the acceptor status a debtor for the amount due) and credits the Bank Account or Cash Account (the amount he pays to bank). The acceptor debits the Bills Payable Account, the noting charges and credits the Drawer‘s Account (Restores the status quo of the creditor to whom he is due to pay). Hence option A. is correct. All other options are incorrect.
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