I have started a consultancy business recently. Since I do not have a current account account, I incurred business expenses from Saving Account by Cheque/Net Transfer. Can anybody help me as to how to account these expenses in books of accounts of the business and the accounting entries for the same.
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Official expenses incurred from personal savings account
Replies (4)
no problem. you can use saving account in a business.
but if you will do cash transactions more than 10 lakh in a year, you may get notice from IT department
entry for expenses
exepnses dr
bank a.c. credit
but if you will do cash transactions more than 10 lakh in a year, you may get notice from IT department
entry for expenses
exepnses dr
bank a.c. credit
no problem. you can use saving account in a business. but if you will do cash transactions more than 10 lakh in a year, you may get notice from IT department . IN NEXT FINANCIAL YEAR IN DAY FIRST START YOU CAN OPEN CURRENT ACCOUNT AND RUN CONTINUE...
no problem. you can use saving account in a business. but if you will do cash transactions more than 10 lakh in a year, you may get notice from IT department . IN NEXT FINANCIAL YEAR IN DAY FIRST START YOU CAN OPEN CURRENT ACCOUNT AND RUN CONTINUE...
Assuming you are runnning a proprietorship organisation, There is no issue in showing the personal Bank account int your books( Except issues with bank and IT notices). You have 2 options
1. Do not show Bank account in books and use entries in the following manner.
Expense/Asset A/c Dr xxxx
Capital A/c Dr xxxx
To Capital A/c xxxx
To Income/Liability xxxx
2. Show bank account in Books and account personal transactions as drawings/additions as appropriate.
In my Opinion Option 2 is better as it helps in proper calculation of income Tax
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