BILLS RECEIVAl'.I.K AND BILLS PAYABLE. 651 



BILLS REt'KIY ABLE AND BILLS PAYABLE 

 ACCOUNTS. 



111. Beginners in the study of book-keeping nes get these two 



accounts confused, but all doubts may at such times be easily and quickly 

 dispelled by soliloquizing in the following way: "Will the money be 

 receivable to, or payable by us when this note is due ? If receivable to us, 

 Bills Receivable account is affected, and we must make the entry to the 

 Bills Receivable account ; if ^-ii/abfi' by us, Bills Payable account is affected, 

 and we must make the entry to the Bills Payable account." 



1 1. Accepting a time-draft which a person draws upon us, is exactly 

 the same in effect as giving that person a note ; for, by BO doing, we pn>- 



e to pay him at the expiration of a certain period of time, with or 

 without interest, for value received, a certain amount, which is neither 

 more nor less than we do when we give a note. When a person accepts 

 ami returns to us a time-draft which we made on him, it is, of course, the 



te in effect as though we received a note from him. Time-draft and 

 Acceptance are but different names for the same paper. Acceptance is 

 the one must in use, but Time-Draft is the term adopted in this book, as 

 it is more readily comprehended by the pupil it showing, at once, that 

 a certain time is givi-n in which to pay the draft. Time-Drafts are of 

 no value whatever, until they have been accepted and returned to the 

 drawers, or the persons who draw the drafts; as, not until then is a 

 written promise to pay made ; therefore, no entry is made until the draft 

 has been returned accepted, when the entry is made precisely the -am 

 if a i>ol<> had been received or given. 



1JJJ. There are four kinds of drafts, viz.: Bank Drafts, On-lVmand 

 t Drafts, and Time Drafts. The first three belong to the 



, aecount, and the last, as heretofore explaine 1, belongs to the Bills 



.ml Bills Payable accounts. A Dank Draft is a draft drawn 



by one bank on another. An On-Demand Draft is a draft drawn by one 



on upon another, ami is payable on demand, or immediately, A 



it Draft :'r drawn by -n upon another "at si^ht," and 



by the person up<>n whom it is drawn, is payable just three 



after i I pted. Drafts are sometimes drawn at one, thra 



ht," and n.ade payable to either a banker or BOOH otl 

 When they are thus drawn, W< ;M in the same man 



that we \\ould a Time I haft, hut ma!. ' ry of it, .simply makii 



lorandum in lead pencil on their a--count in the Ledger simil.ir to 



