Usually, this agreement stipulates entered into by the purchaser that payment must be made within 30 days. In recent years, the huge increase in the use of credit cards issued by financial institutions to their customers, much has been done to simplify the accounting transactions.
Bills, but not widely used, are still important in the wholesale and foreign trades. Bills have certain characteristics that make them negotiable documents. A financial document is negotiable if it can be transmitted from one person to another. This is achieved by the holder of the approval of the document and delivering it to the other party. Bearer documents are transferred by delivery alone. To be negotiated, a financial document or bill of the property must, under certain circumstances, the rights of the owner of his inalienable, even though the rights of his predecessor were defective or invalid.
A bill is a negotiable document in the accounting process. .
There are at least three parties in the accounting bill records, namely the drawer, the data subject and the recipient or bearer. The three parties must be different persons; the same person can be to become party to the bill in more than one capacity. For example, specify the tray that the money should be spent on himself, so he is both the drawer and payee simultaneously.
The definition of a bill stated that it could be put to a ‘carrier’, in which case it might make a person in possession of the bill on the due date of payment of the claim concerned. This means that the right to receive payment of an invoice can be transferred to another person just by handing it to him or her. If the word ‘carrier’ is crossed out and replaced with ‘order’ which means (in relation to the potential liquidity of the document) that the person is instructed to pay the concerned beneficiary amount, or to a person specified by him writing or later specified by each holder. Such written specification must be stated on the invoice itself (usually on the back) and is known as an approval. Therefore, within the accounting process bill is considered a negotiable document.
If a company is a large number of bill transactions, it is not practical to have a separate entry for each accounting transaction. In such cases, a separate magazine with the necessary columns used in the alternative magazine. Accepted bills are valuable documents and, as in the case of cash, must be properly regulated in an accounting system. They must be stored safely after receipt immediately. The balance of the accounts receivable to be held regularly audit compared to the entries in the accounts book and bills on hand.
Bills are current assets and are shown in the balance sheets as such, along with other current assets. They are carried at face value less any provision for doubtful recovery. Bills are often combined with debtors as one amount shown as receivables and invoices. As in the case of debtors should be provided for all accounts that could possibly be irrecoverable.