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Post Info TOPIC: Reversal of Drawings? (personal money back in to an account used by a sole trader)
Kirst


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Reversal of Drawings? (personal money back in to an account used by a sole trader)
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Hi there all!

 

I have a SOLE TRADER customer.  He went through a phase of poor cash flow and therefore had to put some "personal" money back into the account to cover bills.

 

Bearing in mind he's a sole trader rather than a limited company, therefore the DLA doesnt apply to this situation (correct?)...would I show these payments as a credit against the drawings account?  Or is there some other way that these credits should be shown?



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Robert Pearce


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Yes, the director's loan account is only relevant for companies.

I would show this as capital introduced.



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Pearce & Co - Chartered Accountant and Chartered Tax Adviser 

www.pearceandcoaccountants.co.uk

These comments are outline only and are not a substitute for specific professional advice.
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