Accounting for asset based off different scenarios

LLiya4y ago

Hi sir Hope all is well. My questions are: 1. How do I account for a personal asset that has been used in the business? 2. How do I account for an asset purchased for the business but paid with my personal funds, and most likely I won't get that money back because assumed I am the director? Thank you in advance.

John MoffatTutor4y ago#1

1. We would debit the asset account and credit a loan account (assuming it was a limited company. If a sole trader then we would credit capital.) 2. The same entry as (1). Being a director certainly does not mean that you will not get the money back!! However neither of these are relevant for the Paper FA exam.

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