CA Foundation · Accounting · Bills of Exchange and Promissory Notes
Nair Enterprises discounted a ₹50,000 bill with its bank for ₹49,000. On the due date the bill was dishonoured, and the bank debited Nair's account with the bill amount plus ₹300 noting charges. What is the amount debited to the acceptor's account in Nair's books on dishonour?
The acceptor's account is debited ₹50,300. When a discounted bill is dishonoured, the drawer pays the bank the full face value of ₹50,000 along with noting charges of ₹300, and these are recovered from the acceptor.
- A₹50,300Correct
- B₹50,000
- C₹49,300
- D₹49,000
Explanation
On dishonour of a discounted bill, the drawer is liable to the bank for ₹50,000 plus ₹300 noting charges, and recovers the total from the acceptor. Acceptor's A/c is debited ₹50,300. ₹50,000 ignores the noting charges; ₹49,300 wrongly uses the discounted proceeds.
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