Loan Account
HI , I opened a purchase order for product to purchase. The funds for these items will be funded from finance company and paid dirrect to the supplier. I asked my accountant for advise on the best wa...
Forum Discussion
Hi Swampy-66
I'm sorry to see that no one has replied to you yet. As we're not accountants we not permitted to advise on how these transactions should be recorded. We do recommend getting the exact journals/transactions from your accountant to ensure the transactions are correctly recorded and reported.
Having said that, I am happy to give you some general information from a software perspective. If your accountant advised to record a general journal crediting the liability account and debiting cost of sales, then you're correct that recording a bill to the same cost of sale account will duplicate the amount. You would have to record either one transaction or the other. If you recorded only the bill transaction, when recording the Pay bills transaction you could select the 2-xxxx loan liability account in the Pay from account field. That would post the loan liability to that account and close the bill.
Since you mentioned that the purchase is for stock, something else to note is that if you create Items and plan to track (inventory) this stock you'll need to select the cost of sales account when creating the Items. When you sell an Item, the sale transaction posted will also debit that cost of sales account.
Please let me know if you need further help.
If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.
