PAYMENT MADE TO CREDITORS FROM HUSBAND ACCOUNT

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This discussion addresses how to handle payments made between a husband and wife's separate sole proprietorship businesses, both of which have GST registration. The core issue is when payments to creditors of one business are made from the other's current account. A suggested solution involves creating liability ledgers between the businesses to track these inter-company transactions, ensuring a nil effect in the books of accounts after settlement.

raghavendra b

raghavendra b (Querist)

03 June 2020 DEAR SIR,

HUSBAND AND WIFE ARE HAVING TWO PROPRIETORSHIP TRADING BUSINESS BOTH ENTITY HAVE GST REGISTRATION NUMBER. PROBLEM IS BOTH HUSBAND AMD WIFE PAYMENT MADE TO CREDITORS SOME TIME PAYMENT MADE TO CREDITORS OF HUSBAND BUSINESS FROM HIS WIFE'S CURRENT ACCOUNT AND SOME TIME SAME PROBLEM.

HOW TO TREAT THIS ENTRY PAYMENTS IN THIS CASE, HOW TO REPAY THE AMOUNT IN WHICH HEAD TO BE ACCOUNTED

SUGGEST ME

REGARDS

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

05 June 2020 Husband can create a liability ledger in the name of wife's business and credit the same while debiting the Vendor Account and vice versa in case of wife's business. Later payment can be made to set off such liability to have a nil effect in the books of accounts.

raghavendra b

raghavendra b (Querist)

06 June 2020 THANK YOU MADAM

REGARDS

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