bills receivable

Amounts owed to the company for goods sold or services rendered are known as bills receivable. If a bill is a receivable for one business, it is a payable bill for another.

Meaning and definition of bills receivable

The bills of exchange that a company will receive payment for in the future, and the part of the company's accounts that shows these bills.

use of bills receivable

» Drawer can keep the bill until it's due and get the money from the person who is supposed to pay it. » He can endorse the bill in favour of his creditors.

What happens if bills receivable are not paid?

When a bill of exchange is dishonored, the amount owing by the customer is moved back to the account receivable account. 

Account format for bills receivable

The bill receivable books are kept in chronological order. When there are many transactions in an organisation, it is first convenient to keep day books. Individual trade receivable accounts are now recorded in books.

Balance Sheet Bills Receivable

Short-term bills receivable- Bills due within one year of the balance sheet date are listed in the balance sheet as current assets.

Balance Sheet Bills Receivable

Long-term bills receivable- Bills due after one year from the balance sheet date are listed in the balance sheet as non-current assets.

The Different Types of Bills Receivable

There are five types of bills receivable and they are as follows: · Creating Bills Receivable · Remitting Bills Receivable · Managing Bills Receivable · Bills Receivable in the Balance Sheet · Accounting or Entries on Payments Receivable