Part Payment of the Bill

It often happens that the drawee realizes that he is unable to make the entire bill payment at one time. During such situations, he makes a part payment of his bill of exchange instead of paying the entire amount. However, in accounting practice, this part payment is never treated as a mode of payment regarding a bill of exchange.

There are certain steps which are adopted for the accounting treatment of these part payments of a bill. These are as follows-

• Dishonouring a bill
• Either by drawing a fresh bill or receiving the total bill amount due
• Accepting this part payment
• Charging interest on the amount which is still due.

Links of Previous Main Topic:-

• Book keeping
• Meaning of gaap
• Origin of transaction
• The concept of debit and credit
• Subsidiary books or sub division of journal
• Balancing of ledger accounts
• Meaning of trial balance
• Balance sheet in final accounts without adjustments
• Adjustments additional information in preparation of final accounts
• Meaning of bank reconciliation statements

Links of Next Accounting Topics:-

• Bills of exchange concept of bills of exchange
• Errors affecting or disclosed by trial balance introducing the concept
• Meaning of depreciation