Question

    Bills for collection are shown by the bank under which

    head?
    A On asset side of the balance sheet Correct Answer Incorrect Answer
    B On liability side of the balance sheet Correct Answer Incorrect Answer
    C On the income side of the balance sheet Correct Answer Incorrect Answer
    D As a note below the balance sheet Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    One of the services provided by banks to their customers is to collect the dues against Bills of Exchange from their customers on the due dates. Where the bills have been discounted the proceeds of such bills on due date are treated as incomes of the bank. On the other hand, if bills have not been discounted, the proceeds on the same on maturity are credited to the account of the customer. The particulars will be recorded in a separate book called Bills for Collection Register. Bills sent for collection have to be shown by way of Note as per Third Schedule.

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