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What is bill receivable and bill payable? |
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Answer» Bill receivable: It is a bill receivable for the person who draws the bill. Generally, drawer of a bill receivable is a creditor. A bill receivable is an asset for the drawer of the bill. e.g., Sona has to receive ₹ 9,000 from Rupa. Here, Sona would draw a bill of ₹ 9,000 on Rupa and Rupa would accept the same. In this situation, this bill is a bill receivable for Sona. When the drawer of the bill and the payee are different persons, then it is considered to be a bill receivable for the holder of the bill. Bills receivable shows as current asset in the Balance Sheet. Bill payable: It is a bill payable for the person who accepts the bill. Generally, acceptor of a bill is a debtor. A bill payable is a liability for the drawee (acceptor) of the bill. Bills payable shown as current liabilities in the Balance Sheet. In the above illustration, a bill is a bill payable for Rupa. |
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