AN ASSESSEE RECEIVED A AMOUNT RECEIVED FROM ONE PERSON RS. 500000 ASSESSEE WAS USED 100000 FOR PERSONAL USE AND 400000 FOR BUSINESS USE SO IN THIS SITUATION PARTY IS CREDITOR OR UNSECURED LOAN
12 October 2009
Creditors are those persons or business entity to whom amount payable due to some purchase made or service utilised by the business entity.
Creditors are generally of two types
Creditors for goods : for purchase Creditors for expenses: Biils payable to service provider.
Loans are money received for use in business May be secured or unsecured and may be long term and short term.
In yopur case it seems to be Unsecured Loan of Rs. 4,00,0000
12 October 2009
The proprietor would have taken loan based on his business credentials and therefore the entire amount of rs.500000 should be treated as loan and the amount what he has utilised will be drawings / withdrawal of capital.
CAclubindia
