banner_ad

No one has any point?????????

Accounting Entries 335 views 1 replies

hi there< br> while checking the accounting done by previous accountant , i came to know that there is cash shortage from the beginning of the financial year as all the expenses are paid by the director of the company from the personal fund.< br> now how should i adjust the cash, can i pass the entry like cash a/c Dr to director's loan a/c and later on square the amount by paying the director's loan by company's cheque?

Replies (1)

1) Business expenses incurred by an individual for the company use or benefit, which are to be reimbursed to the individual are the most common transactions, such as for business travel or meals or purchases of small items if they are authorized.  For these costs, which are company expenses posted to company expense accounts, ideally the individual completes an expense report which requires an approval that is input as an A/P transaction voucher and they are reimbursed via A/P.

2) Loans to the company from Shareholder or Employee loans are much less common and usually significant amounts. These are funds loaned to the company that are agreed to be paid back to the individual and ideally there is a formal loan document stating the terms of repayment including dates and amounts and specifying if interest will be paid and how much. This would be setup as a Liability account, since the amount is Payable to the Employee or Shareholder, I prefer account name that says that, such as Note Payable to Shareholder or Employee, then it is clear what should happen with account.

 

Choice is yours to choose one of them. But If you are choosing Director loan account than you have to pay interest for that and u nee to have document of Loan.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 28 May 2026
SEMI QUALIFIED/ CA DROPOUTS/ ARTICLES

T R SOOD & CO

New Delhi

CA Inter

View Details
Company
21 May 2026
Associate

PWC

Kolkata

CA

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
19 May 2026
Fundraising Expert

MentorsWorld Ventures Private Limited

Ahmedabad

Others

View Details
Company
16 May 2026
Audit clerk

mgirt & co

Bengaluru

CA Inter

View Details
Company
ARTICLESHIP 17 May 2026
CA Article /Trainee

Malik Sunil & co

New Delhi

CA Foundation

View Details
Company
26 May 2026
Senior Accountant cum purchase Manager

Vardhaman Group of India

Pimpri Chinchwad

CA Inter

View Details
Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details