Official expenses incurred from personal savings account

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. 

 

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

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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