There is another question also relating to personal book keeping as below.
If I purchase for my house, say a T.V, should I show it in assets side in balance sheet or should I show it as an expense ?
What is the correct way to accouunt and what is the normal practice?
Thanks in advance.
| Originally posted by : Amit | ||
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There is another question also relating to personal book keeping as below. If I purchase for my house, say a T.V, should I show it in assets side in balance sheet or should I show it as an expense ? What is the correct way to accouunt and what is the normal practice? Thanks in advance. |
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It will be treated as drawing...
However, if purchased for office, the same will be shown as Fixed Assets....
when you purchased asset for persobal use it is not a asset it is expebnditure for personal use show as drawing for personal use
| Originally posted by : Arvind Sharma | ||
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Originally posted by : Amit There is another question also relating to personal book keeping as below. If I purchase for my house, say a T.V, should I show it in assets side in balance sheet or should I show it as an expense ? What is the correct way to accouunt and what is the normal practice? Thanks in advance. It will be treated as drawing... However, if purchased for office, the same will be shown as Fixed Assets.... |
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AGREED.
| Originally posted by : Arvind Sharma | ||
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Originally posted by : Amit There is another question also relating to personal book keeping as below. If I purchase for my house, say a T.V, should I show it in assets side in balance sheet or should I show it as an expense ? What is the correct way to accouunt and what is the normal practice? Thanks in advance. It will be treated as drawing... However, if purchased for office, the same will be shown as Fixed Assets.... |
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agreed
i should show assets in the b/s but not made depreciation on it, because it advisable for personal assets and like gold, if u treated as drawing then not transparant accounting, so at any time i. t officer can demand explanatin it is easily availabe,
Agreed with the answers provided by the other members.
Thanka a lot for your answers. Now I know how to do the entry. Buy, again, can u please let me know the meaning of term drawing in above answer's context?
say you are salary earner, and get salary after deducting TDS, so C2C is with you,
now you purchased the following
1) garments for self
2) grocery for family
3) petrol for your two wheeler
4) movie tickets for family
5) cosmetics for females of house
6) gifts for relatives
7) jewellary for wife
you spent the following
1) air ticket for tour
2) taxi fare for tour
3) dining at hotel
4) credit card payment, cc used for misc expenses during the course of living
5) rent paid for house / Tax paid for house property you are living
6) electricity bills / telephone bills of house
7) medical bills
how many of such expenses you can account and whats the head for such expenses? as there is no impact of tax on your personal nature of expenses, except the jewellary you purchased can be capitalized in assets.
So these expenses are outgo of capital and its only waste of accounting exercise to maintain these, but a gross outgo is created as "drawings" for the year ( in installments during the year) which represents the cost of living by the tax payer.
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