CMA Foundation · Fundamentals of Financial and Cost Accounting · Bills of Exchange
A bill of Rs 30,000 accepted by Mohan was dishonoured on maturity. The drawer, Geeta, paid noting charges of Rs 150 to the notary. Mohan is liable for the noting charges. What amount will Geeta debit to Mohan's account on dishonour?
Geeta should debit Mohan with Rs 30,150. The bill amount of Rs 30,000 reverts to the acceptor on dishonour, and the Rs 150 noting charges paid to the notary are recoverable from him, so they are added to the debit.
- ARs 30,000
- BRs 29,850
- CRs 30,150Correct
- DRs 150
Explanation
Noting charges are recoverable from the acceptor, so they are added to the bill amount. Debit to Mohan = 30,000 + 150 = Rs 30,150. Rs 30,000 ignores the charges, and Rs 29,850 wrongly deducts them.
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