Current Account

KVeevers
KVeevers Registered Posts: 67 ? ? ?
HI

can someone tell me

how are the doublentry is from

interest / salary /shared profit on the credit side in the current account?

many thanks in advance

katrin

Comments

  • Katrin (sounds Estonian?),

    Interest and saleries are debits in the expense accounts and credits in the current account. This is the double entry.

    If anything is paid out of the business bank it is on the credit side.

    As shared profit has left the bank account, it is on the credit side of the business bank account and the debit side of the owners (personal) current account.
  • KVeevers
    KVeevers Registered Posts: 67 ? ? ?
    hi german lol

    but in my books

    the drawings are on the debit side and interest on capital -if a partner get salary-and the shared profit is on the credit side

    so what di i not understand

    if a partner is entilted for salary where does it comes from because in the books it says the salary on partners are not entered as a expense
  • rachy1975
    rachy1975 Registered Posts: 366
    i struggled with this too but now im not thinking to much into it just remembering that drawings and interest on drawings go on the debit side and everything else is a credit...
  • KVeevers
    KVeevers Registered Posts: 67 ? ? ?
    hi rachy

    thank you i think the interest and salary and shared profi (credit side)there is no second entry on the debit side


    not like the usual salary if you would pay an employee :credit bank debit salary

    is that right ?

    i got really headache now still need to :laugh: about it that something small like this can do that to your head.
  • rachy1975
    rachy1975 Registered Posts: 366
    yep thats it i think!!! lol
    knowing my luck they will prob throw something different into the exam next week!!

    :ohmy:
  • KVeevers
    KVeevers Registered Posts: 67 ? ? ?
    Good luck

    you be fine

    and i hope it is right :lol:
  • There are 2 difference accounts.

    The business current account and the owner’s personal current account.

    Debit
    Expenses
    Assets
    Drawings

    Credit
    Liabilities
    Income
    Capital

    The above acronym applies to the business bank account.

    Have you got the past paper that the question relates too?
  • KVeevers
    KVeevers Registered Posts: 67 ? ? ?
    hi
    is in my study books


    would like to know where the double entry is for the credit side entry in the current accounts i.e.
    business account for normal employee : debit salary credit bank
    current account personal account : ????? credit salary


    i really dont get this

    many thanks for everybody whos helping me out
  • mikes
    mikes Registered Posts: 254
    for the personnal account it would be debit Drawings and credit bank., as an owner taking monies out of the company for their own use would be an expense.
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