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Hi John, i would like to know more about DIRECTORS LOAN ACCOUNTS (DLA)?
Let say, example of bought goods for resale and paid by director.
So, what is the double entry?Do at Journal entry?
Dr Payables
Cr DLA??And, which chapter do i need attention?
It depends whether the goods were invoiced to the company or invoiced to the director.
If they were invoiced to the company, but the director paid the bill, then the entry would be:
Dr Payables
Cr Directors loan accountIf they were invoiced to the director (but the company used the goods) then the entry would be:
Dr Purchases
Cr Directors loan account
(There would have been no recording of the invoice in payables).There is no lecture on this, partly because it would be very unusual, but also because it doesn’t warrant a separate lecture.
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