Expense consideration

Co Act 2013 42 views 1 replies
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526 Points Joined April 2018

Few memebership bills were paid, which seems to be related to the company. These will be beneficial for company's activities. However, the bills are in the name of director and even the payment has been made from personal credit card.

Can it be considred as company expense while finalising P/L A/c.

 

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On 20 June 2025 at 16:28 Report
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Master in Accounts & high court Advocate
8821 Points Joined December 2011

Considering Personal Payments as Company Expenses To determine if payments made by a director from their personal credit card can be considered company expenses, consider the following: - *Benefit to the Company*: If the expenses were incurred for the benefit of the company and are related to its activities, they can be considered company expenses. - *Documentation*: Ensure there is proper documentation, such as invoices, receipts, and records of payment, to support the expenses. - *Reimbursement*: If the director has been reimbursed by the company for these expenses, it's essential to ensure the reimbursement process is properly documented and compliant with company policies. Accounting Treatment If the expenses are deemed to be company expenses, you can consider the following accounting treatment: - *Account for the Expenses*: Record the expenses in the company's books, ensuring they are properly categorized and accounted for in the Profit and Loss Account (P&L A/c). - *Director's Account*: If the director has not been reimbursed, you may need to adjust the director's account to reflect the company's liability to the director for these expenses. Compliance and Governance To maintain transparency and compliance, consider: - *Company Policies*: Ensure the company's policies on expense reimbursement and personal payments are clear and followed. - *Audit and Review*: Have the expenses reviewed and audited to ensure they are legitimate company expenses and properly accounted for. Consult a Professional If you're unsure about the accounting treatment or compliance requirements, consult a chartered accountant or financial expert who can provide guidance based on your company's specific situation

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On 23 June 2025 at 10:54


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