Treatment of expenses in sole proprietor business

A/c entries 13421 views 13 replies

Dear Sir/Madam, 

Please tell me what is the journal entry for .1) School fees paid by Proprietors Business Bank A/c

2) Cheque issued to any individual from Business bank A/C, who is not our creditor

3) Cheque issued to LICI, GIC, from Business A/C

4) 

Replies (13)

It is better to use personal bank account when the expenses incurred is of a personal nature and nothing to do with the business. So yoy may use drawing account and then repay the same to the business from personal account.

as said by mr. mihir, these personal expenses would be routed through proprietor's drawings A/c... so, you should try to maintain such payments through your personal savings bank a/c...

Dear Sushant

As you have asked in your query........these entry are give below

(1) Drawing A\c (dr) .........

                     To Bank A\c................

Being:- child school fee charge in capital account

(2) Capital A/c ...........(dr)

             To Bank A/c..........(cr)

(3). Drawing A/c .........Dr

           To Bank.........(cr)

Assumption Drawing ledger created under the head of capital a/c

Show expenses as withdrawal from capital... No need to worry...

Sole Proprietorship - Accounting of business Expenses - Accounting of personal expenses and withdrawals

 

  1. All business expenses and payment to Creditors and business loans should be through BUSINESS banking accounts and cash withdrawn from business banking account.

 

  1. All personal expenses, personal loan repayments and personal credit repayments should be routed through PERSONAL banking accounts and CASH withdrawn from personal banking account.

 

 

  1. Due to unavoidable circumstances and situations beyond our control if any personal expenses incurred from business account and business expenses incurred from personal accounts; the same may be routed to respective accounts, be it business or personal through JOURNAL entries.

 

Recommendations:-

Business Balance Sheet and Personal Balance Sheet should be drawn separately and then should be CONSOLIDATED.

Business Profit & Loss account and Personal Capital account should be drawn separately.

agreed with Mr.Valerian D.

I want to start Futures & Options trading through my personal ICICIdirect account. However, my father & father-in-law wants to participate in my business in equal ratio i.e. 33% each. Can I hold a proprietory business account & share the profits generated with my father & father-in-law?

In the construction sector, contract ledger (for each contract) created under which head of account. Direct expenses or Indirect Expenses? pls tell me

beautifuly presentation mr Dsouza. thanks lot.

Take under BRANCH/DIVISION HEAD just like you think that BRANCH ACCOUNTS OR CONSIGNEMT ACCOUNTS.

Sir personal expenses of 100-200 Rs. if we paid through firm or businees cash in hand a/c what will be the voucher should be used in tally soft. I know that first it will be treated as Drawing A/c used for personal nature, but I am confused with the voucher that which will be used - Payment or Journal? I had done the entries through Payment voucher till now.

Dear Sir/Madam, 

Please tell me what is the journal entry for .

1) money transfer from proprietor personal account to Proprietors Business Bank A/c

2) rd investment in 2017 and mature of rd in 2019 and RD mature in 2019 and Proprietors Business started also from 2019 

3) Cheque issued to LICI, GIC, from Personal  A/C

Originally posted by : mukesh
Dear Sir/Madam, 

Please tell me what is the journal entry for .

1) money transfer from proprietor personal account to Proprietors Business Bank A/c

2) rd investment in 2017 and mature of rd in 2019 and RD mature in 2019 and Proprietors Business started also from 2019 

3) Cheque issued to LICI, GIC, from Personal  A/C

 

1) money transfer from proprietor personal account to Proprietors Business Bank A/c
- Account it in Prop Capital Account


3) Cheque issued to LICI, GIC, from Personal  A/C

- Then no need any entries if paid through Personal Account

 

2) rd investment in 2017 and mature of rd in 2019 and RD mature in 2019 and Proprietors Business started also from 2019 

- Explain with details of receipts into Business account or personal account


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 14 March 2026
Associate CA

N N V Satish&co

Hyderabad

CA

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 12 March 2026
Customer Relationship Executive

TAXLET

Calicut

B.Com

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 14 March 2026
Article Trainee

N N V Satish&co

Hyderabad

CA Inter

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details