Making an adjustment (purchase private item via company card)


R

Rob Meade

Hi all,

Ok - the other month I was strapped for cash, I needed to buy a new shower
and used my business card.

I now have a receipt, and £79.98 missing from my business account obviously.

I need to update my accounts to cover the amount, as I have a Directors Loan
Account which currently owes me I'm hoping to perform a series of journal
entries which will cover it...

Could someone confirm that the following would be correct, ie, I dont owe
the business anything and that the amount is covered on the books...

DEBIT CREDIT
79.98 Materials Purchased
79.98 Bank Account
79.98 Directors Loan Account
79.98 Materials Purchased

If someone could confirm, or advise me if the above would be wrong I would
be most grateful.

Regards

Rob
 
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T

Troy Steadman

Rob said:
Hi all,

Ok - the other month I was strapped for cash, I needed to buy a new shower
and used my business card.

I now have a receipt, and £79.98 missing from my business account obviously.

I need to update my accounts to cover the amount, as I have a Directors Loan
Account which currently owes me I'm hoping to perform a series of journal
entries which will cover it...

Could someone confirm that the following would be correct, ie, I dont owe
the business anything and that the amount is covered on the books...

DEBIT CREDIT
79.98 Materials Purchased
79.98 Bank Account
79.98 Directors Loan Account
79.98 Materials Purchased

If someone could confirm, or advise me if the above would be wrong I would
be most grateful.
Your shower has nothing to do with materials. You simply drew some
money from the company, and you cannot recover the VAT.

DEBIT CREDIT
79.98 Bank Account
79.98 Directors Loan Account
 
P

Peter Saxton

Hi all,

Ok - the other month I was strapped for cash, I needed to buy a new shower
and used my business card.

I now have a receipt, and £79.98 missing from my business account obviously.

I need to update my accounts to cover the amount, as I have a Directors Loan
Account which currently owes me I'm hoping to perform a series of journal
entries which will cover it...

Could someone confirm that the following would be correct, ie, I dont owe
the business anything and that the amount is covered on the books...

DEBIT CREDIT
79.98 Materials Purchased
79.98 Bank Account
79.98 Directors Loan Account
79.98 Materials Purchased

If someone could confirm, or advise me if the above would be wrong I would
be most grateful.

Regards

Rob
Rob
Rob
Rob

You really shouldn't be doing the accounts if you don't know this. You
need to go on a course to obtain some basic bookkeeping knowledge.
Otherwise your accountant will be spending a long time correcting your
entries.

Asking on here may confuse you more because transactions are inter
related and you may still be doing something wrong which you haven't
mentioned but it would be related to how someone would answer your
question.

When you say "I" and "my" it is not clear whether you mean you
personally or your company.

Does your business card take money out of your company bank account
immediately? Is it a short or long term credit card? Is it your
personal card?

What is the point of debiting and crediting Materials Purchased? This
has a zero net effect.

You haven't mentioned VAT so I will assume your company is not VAT
registered.

If you are buying Materials then Materials Purchased should be
debited. There should be no more entries to Materials Purchased.

If using the business card takes the money immediately out of ther
company bank account the other entry is credit Bank.

If using the business card results in a the company owing the business
card then the other entry is credit Business Card.

If the business card is your personal card then the other entry is
credit Directors Loan.

Which is the correct scenario? Is there another scenario?
 
P

Peter Saxton

Your shower has nothing to do with materials. You simply drew some
money from the company, and you cannot recover the VAT.

DEBIT CREDIT
79.98 Bank Account
79.98 Directors Loan Account
I see what he was saying now! I thought with the Materials Purchased
entry the shower was used in his business!
 
D

DoobieDo

I see what he was saying now! I thought
you know what thought did...
still it's nice to see that very occasionally you do, in fact, have the odd
thought, even if your thoughts are odd ;p
 
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K

Keith

Peter Saxton said:
Rob

You really shouldn't be doing the accounts if you don't know this. You
need to go on a course to obtain some basic bookkeeping knowledge.
Otherwise your accountant will be spending a long time correcting your
entries.

Asking on here may confuse you more because transactions are inter
related and you may still be doing something wrong which you haven't
mentioned but it would be related to how someone would answer your
question.
Which is the correct scenario? Is there another scenario?
You missed asking him for his credit card number and the three digits on
the reverse, Peter..

<c-h-r>
 
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