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naroo (accountant)     26 March 2011

Please help me

hi frndz

if anyone using credit card then which head is appropriate to classify it. as far i think it shd be under loans & Liablity but my colleague is classifying it under drawing.

pl suggest me who is wrong and why

pl help meeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee.............................

thnx to you all soft and healping hearted peoplessssssssssssssssssssssssssssss......................................................................................thnx againnnnnnnnnnnnnnnnnnnnnnnn



 13 Replies

shibusap

shibusap   26 March 2011

Current liabilities.

1 Like
Joey Tribbiani

Joey Tribbiani (fdg)     26 March 2011

I think the treatment made by your colleague is correct,provided the the credit card debt is paid by the firm itself. In case of sole propeitorship/partnership concern I dont think it will be wiser it to treat it as loans and advances, as it will mean another entry in the form of receipt back of loan rather treat it as drawing and deduct it from profits. You will definitely dont want to increase your assets in the balance sheet for no reason.This is my personla opinion,correct me if i m wrong.... Atleast this is what we do in our office..

student

student (ca final student)     26 March 2011

i think barca fan is rigth.

it should be treated as drawing.

razz

razz (nd)     27 March 2011

it is a facility...should be used as drawings...

sukhpreet

sukhpreet (study)     27 March 2011

should be used as drawings...

charan guptha

charan guptha (article student)     28 March 2011

Buddy,  any liability arised from using a creditcard comes under current liability under Bank OD drawings....that itit is classified according to limit, before desiding we need to see the creditlime of that particular thing then only we can came to know ,if it is bigger amount we can take it as loan according to repayable limit.....................


(Guest)

Before classifying the credit card liability, first get an answer to the basic question ... Is it for personal purpose of any partner/proprietor or for the purpose of business ???

For personal purpose of partner / proprietor :-

In this case the credit card liability is recommended to be treated as drawings of the concerned partner or drawings of the proprietor and debit the amount to their respective capital A/Cs.

For the use of Firm:-

 

In this case there is no doubt at all, treat it as a current liabilties or may be Short term secured liabilty to be more specific.

This is barely my opinion... difference of opinions welcome... and also correct me if i am wrong....

Priyanka Sarda

Priyanka Sarda (CA Final (Article))     28 March 2011

 

Originally posted by : subramanya bhagirath k

Before classifying the credit card liability, first get an answer to the basic question ... Is it for personal purpose of any partner/proprietor or for the purpose of business ???

For personal purpose of partner / proprietor :-

In this case the credit card liability is recommended to be treated as drawings of the concerned partner or drawings of the proprietor and debit the amount to their respective capital A/Cs.

For the use of Firm:-

 

In this case there is no doubt at all, treat it as a current liabilties or may be Short term secured liabilty to be more specific.

This is barely my opinion... difference of opinions welcome... and also correct me if i am wrong....

 I agree wid the above treatment :)

astha

astha (cs foundation pass)     28 March 2011

please help me in cost .i am a cs executive student

Abhishek Jain

Abhishek Jain (RisK Manger)     28 March 2011

 

Originally posted by : subramanya bhagirath k

Before classifying the credit card liability, first get an answer to the basic question ... Is it for personal purpose of any partner/proprietor or for the purpose of business ???

For personal purpose of partner / proprietor :-

In this case the credit card liability is recommended to be treated as drawings of the concerned partner or drawings of the proprietor and debit the amount to their respective capital A/Cs.

For the use of Firm:-

 

In this case there is no doubt at all, treat it as a current liabilties or may be Short term secured liabilty to be more specific.

This is barely my opinion... difference of opinions welcome... and also correct me if i am wrong....

 agreed

SURESH BEDA

SURESH BEDA (NONE)     28 March 2011

hi friend joined my group.helpful for cpt, cs foundation and 11, 12 student 

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naroo

naroo (accountant)     28 March 2011

hi buddies

thnx to all for your suggestion

the person is proprietor. he is using sometime for personal like at hotel, theater, cafe and some time for purchasing office equipment also.

so what to do shd be taken under current liabliry or drawing and pl tell me abot the credit liablity u all r talking about to classify

pl helppppppppppppppp..............................

thnx to all for supportingggggggggggggggggggggggggggggg................................................


(Guest)

Please visit the following link and you will be clear

https://in.answers.yahoo.com/question/index?qid=20070515014706AAFvhvP


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