Diebit balances in directors account
This query is : Resolved
16 April 2009
Dear Sir/Madam
Please prescribe the treatment for the debit balances in directors account who are also the shareholders of the company.
Thanks & Regards
CA Sayeeda Banu
Please prescribe the treatment for the debit balances in directors account who are also the shareholders of the company.
Thanks & Regards
CA Sayeeda Banu
Deepak Goel
(Expert)
16 April 2009
Director's account balance never be debited. Director can give loan to company but they cannot take loan from co. Director should return should their amount immediately.
17 April 2009
Hi
Actually the directors loan account is having a debit balance. I want to know how the company should deal with this and what are the consequences of writting off of this balance. Can it could be settled by declaring dividend.
Please give me the accounting entries to be passed by the company.
Actually the directors loan account is having a debit balance. I want to know how the company should deal with this and what are the consequences of writting off of this balance. Can it could be settled by declaring dividend.
Please give me the accounting entries to be passed by the company.
HUZAIFA HUSSAIN
(Expert)
17 April 2009
Just calculate the interest and if the debit balance is less than the interest than treat the balance as interest. or else see if any remuneration or incentive payable to directors and trf. the debit balance to such accounts.
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