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Personal credit card using for business purpose

sreeja reddy (Articled assistant) (142 Points)

18 May 2020

Can anyone help me out that whether a personal credit card of partners can be used for firm transactions (i,e for business purpose?)

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Asha Kanta Sharma (Manager - Finance & Accounts) (19186 Points)
Replied 18 May 2020

Yes. The business organisation can reimburse such expenses to them via cheque and book expenses in the books of accounts.

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sreeja reddy (Articled assistant) (142 Points)
Replied 18 May 2020

In such cases what accounting entries can be made in the books of accounts at the time of payment and reimbursement?

TAPASYA (CA) (297 Points)
Replied 23 May 2020

Hi Sreeja,

Yes partner's personal Credit card can be used. The journal entry will be:

1) When expense occurs

Expense Account Debit

Partner's capital account Credit

2) When Reimbursement

Partner's capital account Debit

Bank Account Credit

I greatly enjoyed answering your question.

Thought it would be interesting to connect on LinkedIn for more such discussions https://www.linkedin.com/in/ca-tapasya-bakshi-50545491/

Thanks!

sreeja reddy (Articled assistant) (142 Points)
Replied 23 May 2020

Thank you so much tapasya😊

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