Question asked by Jonathan 7 years ago
Took a DL from Directors Current Account out of one of the two company accounts (both with same bank), now repaid into company current account (#1), and then transferred to other company account (#2).
How do I show repayment of DL coming in to company account #1, transferred to company account #2 (account code?), and crediting Director Current Account to clear balance while keeping balance in account #2 correct?
Hi Jonathan
The repayment of the DLA and then the transfer of that money to a different bank account are two completely separate transactions.
I'm assuming you have set up the DLA as a 'Bank" account on the Money>Bank accounts screen.
When you come to explain the money coming in to ac1 use the Transfer tab and allocate it to the DLA bank account. This pays off the DLA.
When you come to explain the payment out from ac1 to ac2 again use the Transfer tab and show the money transferred to bank ac2 (or in the ac2 bank statement use Transfer to record the receipt as from ac1)
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Dad was right in some ways - whatever the state of the economy, there's always jobs for accountants (and lawyers!) ...
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Don't worry it is bound to confuse as a DLA can be a loan account in either way, ie either the director is lending money to the company or the other way around, and so you just have to imagine what it would have looked like if the account had, in fact been another bank account.
CB has tried to help a bit in that if you look at a normal bank account screen it shows Withdrawals & Deposits as column headings whereas in the DLA you will see Lent to company & Drawn from company.
OK, thanks, that worked, but I'm not really sure how... as an engineer that seemed a bit illogical to me, but hey ho ...
Hi Jonathan - the DLA is the source of the money coming into ac1. Imagine the DLA as another bank account, if you receive money into ac1, what is the source? It's the other account, in this case the DLA.
Hi Paul, Thank you for your response - but if I try explain the incoming payment to ac1 via the transfer tab, the DLA is not available as a destination (only as a source), the destination is fixed as ac1 (and yes, DLA is set up as a bank account). If I just show it as payment in to ac1 under 'loan liability', and then transfer to DLA, then that decrements the balance on ac1, so if I then tfr from ac1 to ac2, the balance of ac1 will have been debited twice!
You must 