Accountancy training

Finally, if the loan of credit finances the need for working capital of the company, the project holder must make it fully available to the company so that it is incorporated in the cash of the company: It debits the account 512 "Bank" And credits the account 4551 "Associates - Current accounts" or the account 108 "operator's account." Subsequently, irrespective of the purpose of the financing of the loan of honor, the contributions made must be reimbursed to the partner when the financial situation of the company allows it: It debits the account 4551 "Associates - Current accounts" And account 512 "Bank" is credited. In the case of the operator's account, it may also be levied by the head of the company (account 108 will then be debited instead of account 4551). Conclusion: the loan of honor does not give rise to special accounting entries. It is the acquisitions of which it is the object that must be translated ...

For best accountancy training Best school of accountancy In Pakistan . The purchase of materials with the proceeds of a loan of honor must be accounted for as follows: We debit: The account of class 2 "Fixed assets" concerned, Account 44562 'VAT deductible on fixed assets' And we credit: Account 404 "Capital Suppliers" if the business directly buys the property, Or account 4551 "Shareholders - Current Accounts" - account 108 "Operating Account" if the project holder makes the purchase. For example, accounts 2154, 2181, 2182, 2183 and 2184 may be used for purchases of industrial equipment, fixtures and fittings, transport equipment, office and computer equipment or furniture. Note: Some goods of low value (less than 500 Euros excluding taxes) may, as an option, be recognized directly as an expense and not as fixed assets. In this case account 6063 "Maintenance and small equipment supplies", account 445661 "...

The loan of honor as such does not have to be entered in the accounts of the company created or taken over by the project sponsor since it is the latter who is indebted to it, personally. What it finances, on the other hand, must be. This will mainly concern investments, start-up stocks or, more generally, the working capital requirement of the company. The consideration for this investment must be recorded either as a capital contribution or as a current account. The accounting treatment will depend on the provisions of the loan agreement (in the case of the sole proprietorship, there is only one possibility). Here are the different possible accountings depending on the nature of the goods financed by the loan of honor (non exhaustive list). The counterparty will depend on the method of acquisition: Either the project holder makes the investments directly with the loan of honor without going through the account of his company (he must make sure to put the name of it on the inv...

For best accountancy training Best school of accountancy In Pakistan . Some promoters of business start-ups or business takeovers can be granted a loan on favorable terms (reduced interest rates, no guarantee, etc.). This loan, called loan of honor, generates special accounting entries. The loan of honor in a few words To understand the accounting treatment of the loan of honor, it is necessary first of all to know the main principles and to master the ins and outs. The first characteristic (and the most important in the accounting sense) is that it is a personal loan. It is therefore granted to the project owner himself (the entrepreneur, the entrepreneur or the manager of a company having less than 3 years of existence) and not to its future structure. Reimbursement will be provided by the project holder directly. This is a "boost" for people who do not have enough personal input to start their project. It provides leverage to the extent that it facilitates acce...