Question

Explain briefly the purpose and advantages of maintaining of a Bills Receivable Book

Answer 1

Bills receivable book is a special purpose book that is maintained to keep records of bills received from the debtors.

It contains details such as acceptor’s name, date of bill, due date and amount. for future references.

Benefits of maintaining the bill receivable book:

1. Source of information: The general information related to the each of the bills i.e. the amount, due date and name of the drawee are recorded at one place and hence are easily accessible.

2. Avoid fraud: As the details of all the bills are recorded at one place, possibility of fraud is reduced.

3. Responsibility: The person who maintains the bills receivable book will also be responsible for any errors or omissions.

Therefore, higher degree of accountability and responsibility exists. Also, if any error is detected, then it can be fixed quickly.

4. Time-saving: Recording of bills receivable through the bills receivable book takes lesser time than that of journal entry.