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personal expenses of boss treatment in sole proprietor business

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46 Points Posted on 14 March 2019
our sir paid all the expenses of his family and him are paid through bank a/c of business and how to show all of them in accounts,those expenses are not business expense so how to treat them??
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On 14 March 2019 at 15:00 Report
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CA Finalist
2595 Points Posted on 14 March 2019

The personal expenses should be treated as drawings. The journal entry for the same is:

Drawings a/c/ Capital a/c Dr.

  To cash a/c

34 Reply
On 14 March 2019 at 15:13
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46 Points Posted on 14 March 2019
ok thank you
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On 14 March 2019 at 15:14
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Team Lead
7558 Points Posted on 14 March 2019
what are those personal exp. if it's related to donations medical insurance etc. then it is deducted under chapter Vi a.
30 Reply
On 14 March 2019 at 15:24
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46 Points Posted on 14 March 2019
no, credit card bills, all personal payments related maintance of home and his own sir
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On 14 March 2019 at 15:26
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Team Lead
7558 Points Posted on 14 March 2019
ok that's fine then. show it as drawing from capital account of proprietor
30 Reply
On 14 March 2019 at 15:27
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46 Points Posted on 14 March 2019
ok tq
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On 14 March 2019 at 16:25
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student
315 Points Posted on 14 March 2019

Yes, treat it as personal drawings.

4 Reply
On 14 March 2019 at 19:49


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