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Accounting treatment

Trainee (Accounts Executive) (325 Points)

08 September 2014

What will be the accounting treatment in case of following situation. . 1. Goods purchased by debtor on behalf of company(bill issued in the name of debtor) 2. F.A purchased by director or employee

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4 Replies

NAVEESH DHAR (ADVOCATE- TAXATION ADVISOR) (427 Points)
Replied 08 September 2014

1. purchase a/c. Dr To sundry debtor (name) account 2. Fixed assets a/c Dr To Due to director ( name)

Dixit (CA Final) (2405 Points)
Replied 09 September 2014

Agree Naveesh

Rohit Pandey (Student) (766 Points)
Replied 09 September 2014

Fixed asset purchased by director or employee: Firstly assess the end use of the asset. Whether it is used by company or by director for personal use. If used by company then entry shall be: Debit Fixed Asset account Credit Director's personal account

Rohit Pandey (Student) (766 Points)
Replied 09 September 2014

For goods purchased by debtor on behalf of company: First you must trace out who has made the payment. If payment is made by company then goods purchased so must be debited to purchase account and credited to debtors account. Then corresponding entry shall be: debit debtors account and credit cash / bank account