Current Account

KVeevers

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

[Deleted User]

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

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

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

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

yep thats it i think!!! lol
knowing my luck they will prob throw something different into the exam next week!!

:ohmy:

KVeevers

Good luck

you be fine

and i hope it is right

[Deleted User]

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

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

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.