What is the difference between loans & advances in assets?

This query is : Resolved

Guest

Guest (Querist)

10 July 2012 Dear Sir / Ma'am,

1. if a Loan is given to an employee by XYZ company then it means tht, the emlpoyee has to return the money back to XYZ company..

&

2. if an advance is given to an employee by XYZ company then also it means tht the employee wud return the money to XYZ..

So whts the difference between them?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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10 July 2012 1. Loan is a specific agreement where repayment shall be made in instalments. The company may charge interest on the same. The number of instalments shall be pre determined.

2. On the other hand advance may be for meeting some expenses or advance for contingency, which shall be adjusted on the incurring of the expenses or against the next month's salary.

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