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    vailon's Avatar
    vailon Posts: 2, Reputation: 1
    New Member
    		  
    #1

    May 25, 2007, 11:24 PM
    How to write-off liability
    Let say the company own director $1,000, the entry has been made as:-
    Dr.Travelling Cr. Director

    But now the director says that he will not trace the money and ask the accountant
    To write it off

    Please let me know how to made the entries ( do not transfer $1,000 to Capital account, just write it off)
    omsailogistic's Avatar
    omsailogistic Posts: 39, Reputation: -1
    Junior Member
    		  
    #2

    Jun 3, 2007, 12:49 PM
    Since directors promise not trace the money its an extraordinary income to business
    Pass the following entry:

    Directors... dr $1000
    To Profit and Loss a/c $1000
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