Accommodation Bills of Exchange: Meaning, Features, Accounting Treatment Journal Entries | #BComSem2

What are Accommodation Bills? In Financial Accounting, an Accommodation Bill is a bill of exchange drawn, accepted, or endorsed without any underlying sale or purchase of goods. Unlike a genuine trade bill, it is created mutually between two parties to help each other raise short-term finance.

Key Points Covered:

· Meaning & Definition: Bills drawn not for a trade transaction but for mutual financial assistance.
· Purpose: To share funds, overcome temporary cash shortages, or maintain creditworthiness.
· Difference from Trade Bills: No goods involved; purely a financial arrangement.
· Types: Mutual Accommodation Bill and Solo/Accommodation Bill.
· Accounting Treatment (Journal Entries): When drawn, accepted, discounted with bank, sharing of discounting charges, on maturity, renewal, dishonour.
· Illustrations with Solutions for B.Com Sem 2 exams.
· Key Terms: Drawer, Acceptor, Retiring a Bill, Noting Charges, Discounting.

Why Study Accommodation Bills? It helps you understand how businesses arrange internal financing without bank loans and how to correctly record such transactions.

Perfect for: B.Com (Hons/Prog), BBA, and university exams (Delhi, Lucknow, Mumbai, Calcutta, Rajasthan, etc.)

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