i. Debit Bills Receivable Account
ii. Debit Drawee‘s Account
iii. Credit Drawee‘s Account
iv. Credit Sales Account
A. Only (i) above
B. Both (ii) and (iv) above
C. Both (i) and (iii) above
D. Both (i) and (iv) above
In the books of the drawer, the accounting treatment involved on receipt of a bill of
exchange duly accepted by the drawee is debit Bills Receivable Account and credit Drawee‘s Account .i.e., the combination of statements in (i) and (iii) alternative C. is the correct answer. The other alternatives are incorrect because the combination of one correct answer with the statement of incorrect answer. Drawee‘s Account is debited (ii) as soon as a sale is made or any advances is made and Drawee‘s Account is not debited when the bill of exchange is accepted and sales is credited (iv) when the sale is made and not at the time of acceptance of bill of exchange. Thus, the alternatives A., statement (i) B., combination of (ii) and (iv) D. combination of (i) and (iv) are incorrect.