Bills Of Exchange Accounting Entries Pdf

HiYou can create the special GL indicator for the Bill of Exchange. (assign BOE Receivable A/c)Then Go to OBYH - Define Accounts for Bill of Exchange transactions.Double click on Bank Discount Charges (BDS).

Accounting Entries Depreciation

Define 'Bill Discounting Charges A/c'.Go to SPRO Fin. Acc (new) Bank Accounting Bus Transactions BOE transactions BOE Receivable Present BOE Receivable at Bank Define Bank SubaccountsAssign GL of 'BOE Receivable - Contingent Liability A/c' in Discounting usage.End User Transactions:FB70Invoice BookingF-36To record the receipt of Bill of ExchangeF-33 or FBW3Discounting of Bill of ExchangeF-20 or FBW4Reverse the bill liability on actual collection by bankI hope this will clarify.RegardsKapil. Hi Jemes,The steps for Bills of Exchange Discounting is as follows:1 Creation of 3 GL Accountsa. Bills of Exchange Receivable A/c (Alternative Recon A/c) for Customers under Assetsb.

Bank Bills Discounting A/c with Open item Management flagged under Liabilitiesc. Discount Given A/c under the head ExpensesThe first 2 accounts are Balance Sheet accounts and the last one is the P&L A/c2. Define Alternative Reconcil.Acct for Bills/Exch.Receivable TCode OBYN. There you define the Alternative Reconciliation Account for B/E Receivable against the Special GL W.3. Define Bank Subaccounts TCode OBYK. There you define the Bank Sub Account for Bills Discounting.4.Assign the Discount Given account for automatic postings TCode OBXIOnce you do all these configurations, the flow of transaction would be as follows:1.

Financial Accounting Journal Entries

Post Customer Invoice. F-22Customer A/c Dr.To Sales A/c2.Bills of Exchange Payment F-36Customer A/c Dr. (Spl GL B/E Receivable A/c)To Customer A/c Normal3.Bill Discounting F-33Bank A/c DrDiscount Given A/c DrTo Bank Bills Discounting A/c4. On the due date if the bill is honoured, you have to reverse the contingent liability.

TCode F-20Bank Bill Discounting A/c DrTo Customer A/c Dr. (Spl GL B/E Receivable A/c)Hope this helps you.Regards,Sreekanth. Hi Jemes,Say for example, you have following accounts:1000 u2013 Normal Recon a/c for Customers1100 u2013 Special GL Recon a/c for customers1200 u2013 Bank A/c1300- Bills Discounting A/c1400- Discount Given A/cIn OBYN you have to link your alternative recon a/c against the spl GL WIt looks like this.1000 u2013 1100In OBYK you should link your normal Bank a/c in which you receive the amount to your Bills discounting a/cIt looks like thisCOA1200DiscountingW10001300In OBXI, you will give the account for discount givenIt looks like this1400Hope this helps youu2026.Regards,Sreekanthu2026.

About bills of exchange concept in Accounts Payable.Bills of exchange may be defined as a commitment subscribed by your customer to pay a certain amount on a given date upon presentation of the bill of exchange. They can be used to materialize installment payments.For example, you have accepted that your customer pays the invoice amount in 3 monthly installments of 1000 USD each. You will issue 3 bills of exhange of 1000 usd each and maturing in month in month m, m 1 and m2. The bills of exchange will be sent to your customer for acceptance(customer signs them).Once accepted they will be returned to you.

You will have to post accounting entries. But note that even though the accepted bills of exchange can be considered as payment, you cannot clear the outstanding customer invoice until the bills are effectively paid at maturity date. You then have to post the bills of exchange as a special GL transaction.Again once you have received the bills of exchange you may decide to discount them right away with your bank and this is done with or without recourse. Depending on the option choosen, accounting entries are different. By discounting the bills you receive payment of the bill and this can be used to clear the outstanding customer invoice.But note that until the bill is finally paid by the customer at maturity date you remain liable.

You account for this liability by making postings which will show the discounted bills of exchange as a contingent liability.