294 Notes and Accounts Receivable

294 Notes and Accounts Receivable - Other

Assets

Other

Synopsis

Account 294 is established to record the amounts owed to the dealership by Other parties such as employees, subsidiaries, affiliated companies and third parties who are not customers.

Debits

Credits

The amounts due from employees, subsidiary and affiliated enterprises and outsiders

The amount of payments received from employees, subsidiary and affiliated enterprises and outsiders
Notes and accounts considered uncollectible

Example 1

Record a loan to an affiliated entity in the amount of $100,000.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 294	Notes and Accounts Receivable – Other	$100,000
Account 202	Cash in Bank		$100,000

Example 2

Record a loan to an employee in the amount of $1,000.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 294	Notes and Accounts Receivable – Other	$1,000
Account 202	Cash in Bank		$1,000

Example 3

Record the $2,000 salary paid to parts manager of which $400 is payroll taxes, and record a $150 payroll deduction for the above loan.

Journal: Payroll

Entry:		Debit	Credit
Account 021-07	Salaries – Supervision – Parts & Accessories	$2,000
Account 321	Salaries, Wages and Commissions Payable		$1,450
Account 323	Payroll Taxes Payable		$400
Account 294	Notes and Accounts Receivable – Other		$150

Comments

A debit balance represents receivables for which no provision has been made, such as:

Notes, accounts, loans and advances due from all employees, excluding current balances due for merchandise which should be included with customer notes and accounts receivable
Loans and advances to subsidiary and affiliated enterprises, including amounts due for merchandise when extended terms have been granted
Loans and advances to outsiders

Note:

A detail of these items should be made in this account or in a suitable subsidiary record.