I am having an excess balance of Rs. 3 lacs in my bank account of my Pvt Ltd company which came from my previous Income tax refunds. Can I give this amount as an Advance to another person (who is not a Director in the comany) instead of showing it as an expense.
If I show this amount as an expense the company will incur loss.
29 May 2021
Advance itself cannot be shown as expense. You may give advance to any person if the transaction is related to business. In order to show it as an expense, you need to get the invoice from the person to whom advance has been paid.
29 May 2021
If XYZ is an employee and salary is paid to XYZ, then it is a salary expense. Yes, advance paid to an employee is a salary advance. It is not an expense and the same needs to be deducted from future salary.
05 June 2021
why you need to show advance dummy entry if company got refund let it be there in bank there is no clarity refund is pvt ltd company or your individual refund ? if it is individual refund why you want to show advance to salary today or tomorrow advance need to be adjusted for salary don't pass unnecessary entry . for showing advance or payment you need to transfer money from bank account.
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