BBA Study Material Errors Bill Exchange Rules Regarding
BBA Study Material Errors Bill Exchange Rules Regarding :-In Ts Article You Can Find Meaning cash book Notes . and Bill of Exchange Cash book Means That Its Is Best Topic of Bookkeeping Study For BBA 1st Semester Year . Here You Find Topic Wise,Chapter Wise, Subject Wise Study Material And other Links of Related to the Bookkeeping. How To Learn Rectification Errors Bill of Exchange Rules Regarding Presentment for Acceptance Cash book other You Here . If we talk about BBA then Bookkeeping and Accounting is one of the most important Topic. Bookkeeping is common to all semesters Here we are presenting BBA Bookkeeping and Accounting Study Material and Notes for all Semesters. BBA Bachelor of Business Administration in Bookkeeping and Accounting notes study material in this website cyberpoint9.com/testing most important chapter and Question paper BBA notes in this page more links to BBA notes and study material and question paper mock paper. bba in accounting and finance is an undergraduate commerce course. BBA study in bookkeeping and accounting, financial planning, economics, business organisation and other similar areas of operation in any business organisation. full bba course three year degree course consists of Six semesters. the basic eligibility criterion for bba dgree is qualifying 10+2 or equivalent examination in any stream from a recognized board of the country.Bachelor of Business Administration (BBA) in Accounting programs combine the fundamentals of a business program with concentrated coursework in accounting. Find out what these programs entail and what students do after graduation.bba subject bookkeeping and accounting chapter wise notes study material, question paper, mock paper, sample paper, in this website study point to bba notes.
Presentment of Bills of Exchange for Acceptance
A bill of exchange must be presented for acceptance. However, all bills are not required to be so presented. Only the following bills must be presented for acceptance : (a) Bills Payable after sight or after presentment and (b) Bills in which it is expressly stipulated that they shall be presened for acceptance. However following bills need not be presented for acceptance : (i) Bills payable on demand, (ii) Bills payable on a fixed day and (iii) Bills payable after a certain number of days after date. Even in Cases where such presentment is not required by law, it is advisable that all bills must be presented for acceptance for safety and security. Drawee accepts the bill by signing his name on the bill. He may write the word ‘accepted’ also but it is not necessary. After acceptance, the drawee is known as acceptor.
Example Bill of Exchange (BBA Bookkeeping Notes)
Essential of Valid Acceptance
- Acceptance of Bill : Acceptance must be given on the bill itself. Usual way of acceptance is that drawee writes the word ‘accepted’ across the face or on the back of the bill and signs his name underneath.
- Signature : Acceptance must be signed by drawee either personally or through a duly authorised agent.
- Delivery to Holder : After acceptance, the bill must be delievered to the holder.
Rules Regarding Presentment for Acceptance
- Time for Presentment : (i) If a bill specifies a particular place for presentment, it must be presented at that place only, (ii) If no place is specified in a bill, it must be presented a usual place of business of drawee or at his residence.
- Proof for Presentment : If a bill is to be declared dishonoured for non-acceptance there must be a definite proof of the presentment of bill for acceptance and drawee’s refusal for the same. Holder of bill must prove it before Notary Public and the proof must be duly recorded by Notary Public. Presentment through post office by a registered letter is a sufficient proof of presentment.
- Place for Presentment : (i) If a bill specifies a particular place for presentment, it must be presented at that place only, (ii) If no place is specified in a bill, it must be presented a usual place of business of drawee or at his residence.
- Presentment by whom (Section 61) : A person entitled to demand acceptance, can present the bill for acceptance. How may be the holder of bill or an agent of such holder.
- Time for Deliberation : Sometimes a drawee requires some time for deliberation before accepting the bill. If so, the holder must allow 48 hours to him for deliberation. After 48 hours, he should demand the redeliver of bill, If drawee still dose not return the bill duly accepted, the holder may treat it as dishonoured.
Causes of Difference between Cash Book and Passbook Balance
The following are the causes of difference between the bank balance as shown by the bank passbook and the cash book :
- Cheque Issued but not yet Presented for Payment : When cheque is issued to the creditor in payment of his dues, it is immediately recorded in the cash book in the bank of column. If the cheque is not presented for payment in the bank, will not record in the firm’s account. Generally, there is a time lag between the issue of a cheque and its presentation to the bank. Thus, until the cheques are presented for payment, the cash book will show lesser balance in comparison to the passbook.
- Cheques Paid into Bank for Collection but not yet Credited by the Bank : A trader receives cheques, drafts etc. from time from its customers and sends them to its banker for collection. The trader debits bank column of cash book as soon as he deposited cheques, drafts etc. with the bank for collection but the bank credits the trader’s account only when these cheques have been collected. The Collection generally takes a few days. It results in bank balances as per cash book higher than the balance as per passbook.
- Cheques Paid into Bank for Collection but Dishonoured by the Bank : Sometimes, a cheque deposited into bank is dishonoured. It has the same effect as a cheque deposited but not yet credited.
- Interest Allowed by the Bank : When bank allows interest to a customer for deposits, it will credit customer’s account and his bank balance will increase. But the customer is not making the entry in the cash book simultaneously till he knows the fact, therefore, two balances differ. Thus, the balance shown is cash book is less than the balance shown in the passbook.
- Interest and Divided Collected by the Bank : A banker may receives amounts due to the customer by way of dividends, interest etc. directly from the persons on account of standing instructions of the customer to such persones. The bank credits the account of the customer for such collection as soon as it gets such payments, but same will be entered in the cash book only when customer receives the statement from the bank. Thus, the balance shown in the cash book is less than the balance shown by the passbook.
- Bank charges and Commission Charges by the Bank : The bank charges incidental Charges, commission, collection charge etc. to its customer for the services rendered to them from time to time. The bank debits the customer’s account as soon as it renders such a service and this reduces the ban balance, but the customer will know about such charges only when he receives a statement of account from the bank. Until then, bank balance as per passbook will be less then bank balance as per cash book.
- Interest on Bank Overdraft : When a trader is allowed by the bank to withdraw more than his deposits in the account, the excess withdrawal is known as ‘Overdraft’. The bank charges interest on overdraft and debts the customer’s account with these charges. But the customer will record this is the cash book either on receiving intimation from the bank, in this regard or when he receives the bank passbook duly completed. Thus, the balances of both books will differ.
- Direct Payment made by the Bank on Behalf of Customer : Usually account holder instructs the bank to make certain payment on his behalf such as payment for insurance premium. Interest on loan, electricity bill etc. The bank will debit the party’s account on making the payment and this reduces the bank balance. But the party has no information of the same by it is informed. Thus, the balance shown in the cash book will be more than the balance shown by the passbook.
- Direct Deposit into Bank by the Debtors : Sometime, debtors may directly deposit the amount due in the firm’s bank account. The bank credits the firm’s account immediately on receipt of such payment but the firm will make entry in the cash book only after receiving intimation in this regard. Thus, passbook shows more balance than the cash book balance.
- Any Wrong Entry made by the Bank in the Passbook : Sometimes, the bank may commit a mistake in making entries in the account of customer. A wrong debit or credit may be given by the bank leads to the difference in the balances shown by cash book and passbook. A difference on this account can be eliminated when the error is detected.
Utility of Bank Reconciliation Statement (BBA Bookkeeping Notes)
- It given an authentic proof of the accuracy of the cash book and passbook balances.
- Entries in both the books are automatically checked.
- The cash book may be made up to date by recording some unknown entries.
- Error, if any, may be rectified.
Main Point Regarding Bank Reconciliation Statement
- Bank reconciliation statement is prepared by the customer.
- Bank reconciliation statement may be prepared at any time.
- Bank reconciliation statement is prepared by taking the balance of cash book or passbook and at the end, the balance of passbook or cash book is calculated.
- Debit balance of passbook shows unfavorable (overdraft) balance while credit balance of pass book shows favourable balance.
- Debit balance of cash book shows, favourable balance while credit balance of cash book shows unfavourable (overdraft) balance.
Rectification of Errors (BBA Bookkeeping Study Material)
In financial accounting, every single event occurring in monetary terms is recorded. Sometimes, it just so happens that some events are either not recorded or it is recorded in the wrong head of account or wrong figure is recorded in the correct head of account.
Whatever the reason may be, there is always a chance of error in the books of accounts. These errors in accounting require rectification. The procedure adopted to rectify errors in financial accounting is called “Rectification of Errors”.