Can anyone check my data entry method for the following:
This is my first client. I am new to being in practice.
I am going through cash business receipts given to me by the director and want to know how to process a reimbursement to the directors via sage 50 accounts.
There is only 1 bank account for the business.
I have directors loan accounts to use as set up by the business.
I need to CR the Directors Loan account as a liability and then pay back the director DR to show that they have been paid back what is owed to them. In other words a full record of the use of the businesses finances.
The directors loan account is £0 at the moment.
How would i process the rest to pay the Directors from the bank?
I presume I would do:
DR purchases and CR bank, as a bank payment to show what has been bought for the business.
Then in the journal CR DLA and DR bank to contra the transaction as the money does not want to be taken twice from the bank.
Then in the journal DR DLA and CR bank to reimburse the Director.
Can someone please give a answer that is of some help, so I am confident about dealing with the issue
Edited at 26 May 2017 09:03 AM GMT