Home › Tamil Nadu HSC (Class 12) › accountancy › Accounts from Incomplete Records › Which item relating to bills payable is transfer…
Which item relating to bills payable is transferred to the total creditors account?
AThe opening balance of bills payable
BThe bills payable accepted in the year
CThe closing balance of bills payable
DThe cash paid to honour bills payable
Answer & Solution
Correct answer: B. The bills payable accepted in the year
1. The two accounts are linked by the act of accepting a bill, which converts an ordinary creditor into a bill payable.
2. So the figure that crosses from the bills payable account into the total creditors account is the bills accepted during the year.
3. It appears on the debit side of the total creditors account, because accepting a bill reduces the creditors balance.
4. The opening and closing balances of bills payable stay within the bills payable account itself.
5. Cash paid to honour bills payable also belongs to the bills payable account, not the creditors account.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 1 "Accounts from Incomplete Records", §1.8.1_
Related questions
Opening stock is Rs 28,000, purchases Rs 40,000, carriage on purchases Rs 3,000, sales Rs Carriage on purchases and carriage on sales are taken to which accounts respectively?In the balance sheet prepared from incomplete records, the capital section is built up in In a problem, 'discount allowed by suppliers' of Rs 3,500 is posted in the solution as:In the closing statement of affairs, a provision of 5 per cent is to be created on debtorsWhy is a statement of affairs NOT called a balance sheet, even though it lists assets and Opening capital is Rs 2,50,000, closing capital Rs 2,75,000, additional capital Rs 30,000 Opening capital is Rs 27,500, goods taken for personal use Rs 5,000, additional capital Rs