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wrong account used for deductions

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Mick15
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Mick15
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wrong account used for deductions

We have recently changed from being a sole trader to a company however in error used the business account to make some personal purchases.  these were done during a previous month that we are now trying to reconcile and that has already ended.

how do we justify these transactions.  Do we create it as a director loan and then transfer the money back  the following month or can we use the owner/shareholders drawings option ?

 

 

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Ultimate Partner GDay53
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GDay53
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Re: wrong account used for deductions

@Mick15

 

Welcome to the MYOB Community Forum, I hope you find plenty of useful information.

 

This is something you should be asking your Accountant as to how he wants it treated.

I would use Directors Loans until the accountant gives you an answer.

 

If my response to your query and has helped, please mark my post as a solution to help others in the future.
Graeme Day
Registered BAS Agent #24745540
First Class Accounts Clayfield
Mobile: 0402 841 627
gday@firstclassaccounts.com
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Ultimate Partner DuncanS
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DuncanS
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Re: wrong account used for deductions

@Mick15  @GDay53

 

Mick,

 

I agree with Graeme's answer that you would use a Current Liability called Loan from Director.

You mention that you would repay the monies in the current month.

 

With a Sole Trader, personal transactions are recorded in Equity/Drawings.

A Company uses the Directors Loan.

 

The ATO strongly suggests that a Director has a Personal Bank Account.

You mention that this is your case.

 

Duncan

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
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