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Amit

Accounts

357 Points Posted on 18 May 2023

Hy All

what would be journal entry if proprietor paid business expense through his personal account

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Quick Summary

This discussion explains the correct journal entry when a business owner pays for a business expense using their personal funds. The entry involves debiting the relevant business expense account and crediting the proprietor's personal account. This ensures accurate financial record-keeping by clearly distinguishing between business and personal transactions.

B Durga Prasad

Student

125 Points Posted on 18 May 2023

Journal Entry:
Debit: Business Expense Account
Credit: Proprietor's Personal Account

When a proprietor pays a business expense using their personal account, the journal entry reflects the transaction in the business's accounting records. The "Debit" side of the entry increases the Business Expense Account, recognizing the expense incurred. On the other hand, the "Credit" side decreases the Proprietor's Personal Account, indicating that the proprietor used personal funds to cover the business expense. This entry helps maintain accurate financial records and separate business and personal transactions.

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