looking for some advice please

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
hi there

im looking for some advice. my husband and i have just set up a limited company and we did not have a capital injection into the business, but we have had to pay for expenses out of our own pocket, this money is owed back to us but im not sure how to right it up in the cash book, i have opened it with an overdraft of the amount that is owed back but can we write this as a loan that the business owes us back. please help (just have second child and gone slightly brain dead)

any help would be appreciated

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:looking for some advice please

    Hi

    This would be what forms a Director's Loan account, i.e. money owed by the company to the directors. Usually the entry would be a debit to the relvant expense and credit to the loan account. If you have used your own money to settle liabilities of the company, then you would debit the relvant liability account instead.

    Neil
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:looking for some advice please

    hi neil

    thank you for your advice, im going to debit the loan account, so am i right in saying this would then balance the cash book when i come to do a bank recon?

    sorry to sound really thick, thats what happens when you have children?

    dawn
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:looking for some advice please

    Hi

    Any expenses you pay yourself on behalf of the company should CREDIT the directors loan account as it is money owed by the company to the directors.

    Neil
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:looking for some advice please

    hi neil

    got it thank you for the help :D

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