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Accounting treatment
What will be the accounting treatment in case of following situation. . 1. Goods purchased by debtor on behalf of company(bill issued in the name of debtor) 2. F.A purchased by director or employee
Replies (4)
1. purchase a/c. Dr
To sundry debtor (name) account
2. Fixed assets a/c Dr
To Due to director ( name)
Agree Naveesh
Fixed asset purchased by director or employee:
Firstly assess the end use of the asset. Whether it is used by company or by director for personal use.
If used by company then entry shall be:
Debit Fixed Asset account
Credit Director's personal account
For goods purchased by debtor on behalf of company:
First you must trace out who has made the payment.
If payment is made by company then goods purchased so must be debited to purchase
account and credited to debtors account. Then corresponding entry shall be: debit debtors account and credit cash / bank account
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