Hi,
I would be grateful for some help and clarity on Directors Loan setup in Quickbooks.
I am the owner and director of a company and I need to set up na Directors Loan Account for expenses I personally incurred that are business expenses. I may also give the company a loan in the future too.
May I ask what are the pros and cons of setting it up the Directors Loan Account as a
Current Liability account type
as opposed to setup as a
Bank Account
or as an
Equity Account?
Others in Quickbooks have suggested to set up a Directors Loan account as an equity account.
So the question is what is the difference between:
- Directors Current Account as a 'Bank Account'
- Directors Current Account as a 'Current Liabilities' account type
- Directors Loan Account as a 'Equity Account'
I also noticed a default account already set up called 'Directors Current Account' which is setup as a current liability account type. What is the difference between this and the Directors Loan Account? Is one a longer term liability and will the this Directors Current Account show as a loss as opposed to a loan?
Thank you.
