InvestorQ : what bills for collection are shown in balance sheet ?
pragati made post

what bills for collection are shown in balance sheet ?

Suresh Patil answered.
4 months ago
Bills for collection are instruments that are designed for the settlement of a payment obligation between buyers and sellers. These bills are often used where the buyer and the seller have a business relationship. However, the term bills for collection is primarily used by banking and other financial institutions which collect bills on behalf of customers and charge a certain amount for that purpose. Basically, customers enter into a contract, he wants to receive money against a certain bill and gives it to the bank to receive payment against it from the bank, after which bank realizes the money from the party.

Therefore, at the time of preparing final accounts, these bills are shown on both sides of the balance sheet. It is recorded on the asset side since the bank will receive payment in due course and also on the liabilities side since it will have to be accounted for by customers.