[GNC] Directors loan - do I need an expense account?

Stan Brown the_stan_brown at fastmail.fm
Thu Dec 9 22:40:41 EST 2021


On 2021-12-09 07:23, Dr. David Kirkby wrote:

> I can't understand why you say it's not a liability, when the company owes
> money to someone else? How is it any different to owing money on a credit
> card for example?


The company does not owe you any money. You said money would flow from
the company to you, as a loan. When you get a loan from the bank, do you
say that the bank owes you money? Of course not. The loan is an asset on
their books and a liability on yours.

It is the same when the company lends you money as when the bank lends
you money: an asset to the bank and a liability to you.



-- 

Stan Brown

Tehachapi, CA, USA

https://BrownMath.com


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