What Is Bills Payable?
Bills payable refers to a written certificate issued by the drawer and the acceptor promises to pay a certain amount within a certain period of time. In China, bills payable occur during the purchase and sale of commodities due to the use of commercial bills of exchange. Commercial bills are divided into bank accepted commercial bills and commercial accepted commercial bills. [1]
Notes payable
- Bills payable refers to a written certificate issued by the drawer and the acceptor promises to pay a certain amount within a certain period of time. In China, bills payable occur during the purchase and sale of commodities due to the use of commercial bills of exchange. Commercial bills are divided into bank accepted commercial bills and commercial accepted commercial bills. [1]
- I. Commercial acceptance bills and
- There are two main forms of short-term bills payable: commercial bills payable and short-term loan bills payable.
- After a commercial bill of exchange is accepted, it should be debited for "inventory goods", "
- Bills payable are issued by enterprises and promise to pay a certain amount to
- In order to account for bills payable, enterprises should set up the "Bills Payable" account. The subject
- 1. When issuing payable bills to pay for goods and accounts payable.
- Borrow: material purchase ×××
- Stock materials ×××
- Goods in stock ×××
- Accounts payable ×××
- Taxes payable-VAT payable ×××
- Loan: Notes payable ×××
- 2. Time to pay bank acceptance bills.
- According to the Accounting Standards for Business Enterprises, the handling fees charged by banks and other financial institutions should be treated as financial expenses.
- Borrowing: financial expenses ×××
- Loan: bank deposit ×××
- 3 Interest handling of interest-bearing notes.
- Interest-bearing notes are often marked with a certain interest rate on the coupon, which is used to calculate the interest contained in the note. When the bills expire, in addition to the repayment of the ticket deposit, the company also needs to pay the interest calculated in accordance with regulations.
- Interest = face value × interest rate × note maturity
- Interest on interest-bearing notes is generally paid in a lump sum at maturity; if the interest amount is large, the interest expense payable should be calculated at the end of the interim period or at the end of the year. Interest expenses should be recorded in the "financial expenses" account.
- Borrowing: financial expenses ×××
- Loan: Notes payable ×××
- If the amount of interest is not large and whether the accrual will not have a significant impact on the accounting statements, it can be included in the financial expense at one time when the notes are due to return the principal and interest is paid.
- 4 When the principal and interest of the note are due.
- Borrow: notes payable ×××
- Finance costs ×××
- Loan: bank deposit ×××
- 5. Accounting treatment when no payment is due.
- If the bill that the enterprise cannot pay at maturity is a banker's acceptance bill, the bank pays the bill to the holder, and the enterprise incurs a short-term loan liability. Enterprises should convert bills payable liabilities into short-term borrowing liabilities and treat penalties as non-operating expenses.
- Borrow: notes payable ×××
- Loan: short-term borrowing ×××
- Borrow: Non-operating expenses ×××
- Loan: bank deposit ×××
- If the bills that the enterprise cannot pay when due are commercial acceptance bills, the enterprise should convert the principal and interest of the bills payable into accounts payable, and the penalty interest is also treated as non-operating expenses.
- Borrow: notes payable ×××
- Finance costs ×××
- Loan: accounts payable ×××
- Borrow: Non-operating expenses ×××
- Loan: bank deposit ×××