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Thread: Where to report credit limit in financial statements

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    Where to report credit limit in financial statements

    Hai

    Please help me here.

    How do you treat a Credit limit on the Financial Statements, for example, My client have a credit limit of R10 000 each months and I would like you to advice me on what happens when he pays back the bank, Let's say for example he uses the credit to pay operating Expenses, but what is gonna be our entry Books when he makes payments to the Bank?

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    Diamond Member adrianh's Avatar
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    Putting the entry into the correct place would be a good start!
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    Site Caretaker Dave A's Avatar
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    Let me help here by moving the question into its own thread in the right forum.
    The trouble with opportunity is it normally comes dressed up as work.

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    @Sbusiso28: Are you referring to a bank overdraft?

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by dellatjie View Post
    @Sbusiso28: Are you referring to a bank overdraft?
    Or perhaps a revolving credit facility? (in which case the repayment term becomes relevant).

    As I understand it, the limit itself would only be reported in the notes to the financial statements, with the outstanding balance reported in the balance sheet. However, the nature of the facility is material to exactly how and where it is reported, and accordingly how you set up the account.

    What financial program you are using might also be useful information.
    The trouble with opportunity is it normally comes dressed up as work.

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