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Owner personal expenses

02 February 2024

dear sirs
my client make a expenses of rs10000/- for own use but how can I record this expenses in tally prime and what is the effect of this expenses in balance sheet and profit &loss account
thanks in advance and please reply fast

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10 Replies

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 03 February 2024

You will have to show it as drawings from his capital account. Expenses of personal nature will not be recorded in profit and loss account since only business expenditure are shown there

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 03 February 2024

Yes I agreed with Mr CA Altamush Zafar...

@ Sayed Nabil,

Owner's personal expenses can't be treated as business expenses. In case owner doing personal expenses through business account then it will be account in his capital account.

If the firm's account is old then check out the capital ledger. It have two ledgers like Capital A/c & Current A/c (under capital account). You can account the expenditures in Current A/c.

Note :
A) Capital Account -
AA) Capital Account - Only Capital Account created at the time of starting business. Only investment No transaction can be account in this capital account.

AB) Current Account - Owner's all Withdrawings, Depositing for shortage of fund and his own expenditures is accounted in this ledger...

Note: If no need separate ledger then you can account the transactions in single ledger....

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 03 February 2024

pass Journal entries as follows.

Drawing A/c Dr 10000
To Cash or Bank A/c Cr 10000
( withdrawn from business for personal use)

Capital A/c Dr 10000
To Drawings. A/c Cr 10000
( Drawings transfer to Capital.A/c )

sabyasachi mukherjee (26089 Points)
Replied 03 February 2024

Owner personal expenses to be routed thru drawings. But. in general perso sl expenses not to be charged to revenue account.

Sayed Nabil (307 Points)
Replied 03 February 2024

Thanks a lot all of you for your valuable time and information

Yasaswi Gomes new (Finance ) (4484 Points)
Replied 04 February 2024

All withdrawals will come from capital accounts. Gain or loss in partnership, I'll calculate it. These partners are really rubbish and they will never earn a fortune in Bangalore