Accounts
This query is : Resolved
nidhi singh
(Querist)
26 August 2012
what is the basic difference between loans & advances and loans & advances (assets).... i always get confuse in these terms..plz explain me
CA vidhyadhari
(Expert)
27 August 2012
hi nidhi...
its so simple..
when we take loans & advances from others it is a liability and will be shown on liabilities side..
when we give loans & advances to others it is an asset as we get that money back in future. so it will be shown on assets side...
its so simple..
when we take loans & advances from others it is a liability and will be shown on liabilities side..
when we give loans & advances to others it is an asset as we get that money back in future. so it will be shown on assets side...
Jagga Rao Malipeddi
(Expert)
30 August 2012
The explanation of Ms Vidyadhari is right. In a balance sheet if loans and advances appear in liabilities side, that means the business concern has availed loans and advances (say from bank or from individuals) hence they are the liabilities.
If they appear on asset side, the business concern has lent them to others which are recoverable and hence they are assets.
Hope you are clear now.
If they appear on asset side, the business concern has lent them to others which are recoverable and hence they are assets.
Hope you are clear now.
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