Personal credit card using for business purpose

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Articled assistant
146 Points Posted on 18 May 2020
Can anyone help me out that whether a personal credit card of partners can be used for firm transactions (i,e for business purpose?)
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On 18 May 2020 at 19:37 Report
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This discussion clarifies that a partner's personal credit card can indeed be used for firm transactions. The recommended accounting treatment involves debiting the relevant expense account and crediting the partner's capital account when the expense occurs. Upon reimbursement, the partner's capital account is debited, and the bank account is credited.

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Finance/Compliance Consultant
69413 Points Posted on 18 May 2020
Yes. The business organisation can reimburse such expenses to them via cheque and book expenses in the books of accounts.
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On 18 May 2020 at 20:10
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Articled assistant
146 Points Posted on 18 May 2020
In such cases what accounting entries can be made in the books of accounts at the time of payment and reimbursement?
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On 18 May 2020 at 20:13
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CA
297 Points Posted on 23 May 2020

Hi Sreeja,

Yes partner's personal Credit card can be used. The journal entry will be:

1) When expense occurs

Expense Account Debit

Partner's capital account Credit

2) When Reimbursement

Partner's capital account Debit

Bank Account Credit

I greatly enjoyed answering your question.

Thought it would be interesting to connect on LinkedIn for more such discussions https://www.linkedin.com/in/ca-tapasya-bakshi-50545491/

Thanks!

 

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On 23 May 2020 at 16:31
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Articled assistant
146 Points Posted on 23 May 2020
Thank you so much tapasya😊
1 Reply
On 23 May 2020 at 17:25

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