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What is the entry when the company lends money to an employee?

Accounting Employee Relations Bookkeeping Human Resources Management HR Management
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Question added by Michael Lagunday , Accountant , Dubai Camel Racing Club
Date Posted: 2015/07/29
Upvote (3) Views (12) Followers (9) Answers (6) Report Question
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Abraham Varela
by Abraham Varela , Audit Manager , KPMG Auditores SL

Right. Loan to Employees is a financial asset and should be clasified as an other receviables account.

Irfan Aziz
by Irfan Aziz , Assistant Manager (Accounts and Tax) , Fist Security Private Limited

The Entry would be 

Loan to Employees          xxxxx

      Cash                                         xxxx

 

Rizwan Khalid
by Rizwan Khalid , Chief Accountant , Promedic Saudi Arabia

Employees Loan Account (Dr.)

Cash / Bank Account (Cr.)

Joseph Bukenya
by Joseph Bukenya , Accountant , Uganda NCD Alliance

Dr.  Salary advance (loan)

Cr. cash (Bank)

Saidul Alam
by Saidul Alam , Accountant , Akhtar Al Balushi Trad. & Cont. L.L.C

Dr. Employee loan a/c

Cr. Bank

Deleted user

When a company lends money to one of its employees, the company will debit the asset account Loans to Employees and will credit the asset account Cash.

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