A compact size bill and coin acceptor for use in an automatic vending machine or game machine is disclosed to include a face panel having a bill slot, a coin slot and a coin-return slot, a first housing that comprises a bill passage, a power drive mechanism adapted for transferring an inserted bill from the bill slot through the bill passage and a bill recognition module adapted for recognizing the authenticity and value of an inserted bill, and a second housing that comprises a coin passage in communication with the coin slot, a coin sensor module and an optical recognition device adapted for sensing the authenticity and value of an inserted coin, a driven gear set for assisting transfer of an inserted bill through the bill passage, a coin-return passage in communication with the coin-return slot and a gate movable by an electromagnetic valve to open the passage between the coin passage and the coin-return passage.