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Entries in B/S for expenses done by director on behalf of the company

S Sinha ( ) (43 Points)

21 October 2020

For Company (Pvt Ltd) expenses (Purchase entries - invoice in name of the company), the Director had paid from his personal account. But, the same was not reimbursed to him in same financial year.

What are the correct accounting entries & under which head of balance sheet, the same should be shown?

Thanks!

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2 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14149 Points)
Replied 21 October 2020

1) purchase Expense booking entry

purchase A/c Dr

To Trade creditors A/c Cr

( Booking entry of purchase )

Expense paid by the Director on behalf of company

Trade Creditors A/c Dr

To Director A/c Cr

( Company purchase expense paid by Director )

Director A/c will be under Current liability in Balance sheet

On 31 st march same will be remain payable in current liability side in the name of Director in balance sheet on same day will transfer to provisions and make provision

Director A/c Dr

Expense payable to Director A/c Cr

( Expense payable to Director transfer form current liability to provisions in liability of Balance sheet . )

next year on 1 st April show as oping credit balance Expense payable to Director A/c .

when you pay in the next year pass entry

Expense payable to Directors A/c Dr

To Bank a/c Cr

( Last year expense paid by Director reimbursed )

1 Like

S Sinha ( ) (43 Points)
Replied 24 October 2020

Originally posted by : prasad Nilugal
	1) purchase Expense booking entry purchase A/c Dr To Trade creditors A/c Cr ( Booking entry of purchase ) Expense paid by the Director on behalf of company Trade Creditors A/c Dr To Director A/c Cr ( Company purchase expense paid by Director ) Director A/c will be under Current liability in Balance sheet On 31 st march same will be remain payable in current liability side in the name of Director in balance sheet on same day will transfer to provisions and make provision Director A/c Dr Expense payable to Director A/c Cr ( Expense payable to Director transfer form current liability to provisions in liability of Balance sheet . ) next year on 1 st April show as oping credit balance Expense payable to Director A/c . when you pay in the next year pass entry Expense payable to Directors A/c Dr To Bank a/c Cr ( Last year expense paid by Director reimbursed )