personal exp of directors
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 December 2010
Should we transfer personal expense of director to capital account or debit it to companies expenses
or should we first debit to companies exp and transf to their individual account routing through jv
please help me out
Ashish Limaye
or should we first debit to companies exp and transf to their individual account routing through jv
please help me out
Ashish Limaye
24 December 2010
A. As such personal exps of directors are not allowed to b spent from comapanies' income, unless aoa provides for the same. B. If aoa permits such expense, then its added to director's remuneration....
24 December 2010
it will be added to Dir remineratin and will be dr to P&L of company to the extent remineration allowed...
Message likes :
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24 December 2010
Try making these entries
Director's "Personal A/c" Dr. XXXX
to Cash/ Bank XXXX
Then see if there any salary is to be given to him if there is so then adjust his account as without making him salary payment
make this entry:
Director's "Salary Payable A/c" Dr. XXXX
to Director's "Personal Expense A/c" XXXX
If there is no such salary payable then it shall be disallowed expense under Income Tax as personal expenses of director's can not be debited to company's profit and loss account.
Director's "Personal A/c" Dr. XXXX
to Cash/ Bank XXXX
Then see if there any salary is to be given to him if there is so then adjust his account as without making him salary payment
make this entry:
Director's "Salary Payable A/c" Dr. XXXX
to Director's "Personal Expense A/c" XXXX
If there is no such salary payable then it shall be disallowed expense under Income Tax as personal expenses of director's can not be debited to company's profit and loss account.
24 December 2010
show as recovery from directors as assets in Balance sheet.
25 December 2010
Agree with Dhiraj Sir..
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