Personal accounts vs firms accountsbyshikhaon06 May 2014respected sir / madame i am preparing the accounts of a hospital named kapoor hospital. problem here is this that the prop. of the hospital dr .dinesh kapoor make the payment of self assestment tax for hospital through his personal saving account. side by side i am preparing his personal accounts also. so i jst want to know what will be the accounting treatment in the capital account of dinesh kapoor (under kapoor hospital) and capital account of dinesh kapoor (under his personal accounts) please reply as soon as possible
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In hospital books, you may pass entry:
Tax expense Dr.
To Capital
(being tax paid by proprietor)
In personal books, there is no specific entry required, you can just show that in drawings in personal books as tax paid.
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