A self employed with Plumbing business. He bought a new Van (0050 Motor Vehicles) some money was paid by cash (1230 Petty Cash) and the rest he will pay monthly (2310 Hire Purchase).
My problem is he trade in his old van (which was not in the books as he had it since before he started the business) He had some money taken off the new van's bill as a part exchange. How do I classify this?
Think of it logically in that the van belonged to the plumber not the business.
The money off the new vehicle was the same as the garage giving money for the vehicle.
That was the same as paying the plumber, not his business.
That money was then introduced to the business by way of money towrads the new van.
Therefore, its capital introduced to the business.
Also, not the wway that I would use petty cash but if that works for you then no probs (sounds to me more like a casg float of money waiting to be paid into the bank thats been diverted than part of the imprest system).
I don't play with Sage so I'll leave it to you to sort out the nominal codes but the above is in principle whats happened and needs to be recorded.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
