Bill of Exchange Liability Account

Definition

A G/L account that the system uses to record contingent liabilities for bills of exchange (or checks) that you present to a bank or vendor, until such time as they are cleared. It denotes that the bill has not been cleared and that you are liable to recourse.

The account is also used for technical reasons when you transfer a bill between portfolios.

Use

To maintain the liability accounts, in Customizing for Financial Accounting, choose Start of the navigation path Bank Accounting Next navigation step Business Transactions Bill of Exchange Transactions Bill of Exchange Receivable Present Bill of Exchange Receivable at Bank Define Bank Subaccounts. End of the navigation path

This Customizing activity works differently for Turkish company codes than for others. You have to fill out the fields as shown in the table below. Note that in the Bank acct (Bank account) column, you enter the account that the liability account is to be used for, and that the Usage column governs what transaction is meant (for example, in Turkey, Discounting refers to the presentation of a bill to a bank). In the Bank subaccount for liab. column (Bank subaccount for liabilities), you enter the G/L account for liabilities.

Transaction	Bank acct	Usage	Bank subaccount …
Presentation of a bill to a bank	Bank's interim account	Discounting	Liability account
Presentation of a bill to a vendor	Vendor's interim account	Forfaiting	Liability account
Removal of a bill from a portfolio (for transfer to another)	Account for transferring bills between portfolios	Collection	Liability account

Example Example

By way of example, to specify which account you want to use to record the contingent liability when you present a check to a vendor, you would enter data as follows:

End of the example.

Bank acct (Bank account): the vendor's interim account
Usage: Forfaiting (is used in Turkey for presentation of bills to vendors)
Sp. G/L (Special G/L indicator): L (for checks)
Customer recon. acct (Customer reconciliation account): Leave blank, unless you want to differentiate between customers with different reconciliation accounts
Bank subaccount for liab.: the liability account