CLARIFOCATION IN CREDITORS

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rajesh (Querist)
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12 October 2009 DEAR ALL

AN ASSESSEE RECEIVED A AMOUNT RECEIVED FROM ONE PERSON RS. 500000 ASSESSEE WAS USED 100000 FOR PERSONAL USE AND 400000 FOR BUSINESS USE SO IN THIS SITUATION PARTY IS CREDITOR OR UNSECURED LOAN

HOW TO CLASSIFIED CREDITOR AND UNSECURED LOANS

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THANKS IN ADVANCE

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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12 October 2009 Creditors are those persons or business entity to whom amount payable due to some purchase made or service utilised by the business entity.

Creditors are generally of two types

Creditors for goods : for purchase
Creditors for expenses: Biils payable to service provider.

Loans are money received for use in business May be secured or unsecured and may be long term and short term.

In yopur case it seems to be Unsecured Loan of Rs. 4,00,0000

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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12 October 2009 The proprietor would have taken loan based on his business credentials and therefore the entire amount of rs.500000 should be treated as loan and the amount what he has utilised will be drawings / withdrawal of capital.

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