Can you please tell me the difference between 'paid' and 'borne' (e.g. expenses paid by firm and borne by partner) in the cases of realisation expenses ??
Dear Student,
Here is your answer,
Expenses borne by partner means, he will have to personally bear the expenses as its his responsibility, therefore no entry will be passed for this, but when some remuneration is given to partner to borne the expenses, then his capital account is credited and realisation account will be debited with the same amount of remuneration.
But when it is said that expenses are borne by firm and paid by partner, then it means that responsibility to pay the expenses was of firm but actually has been paid by partner, therefore partners capital account is credited and realisation account is debited.
Another case is when expenses ae born and paid by the partner, then there will be no any entry.
As asked by you, expenses paid by firm and borne by partner, it means it was responsibility of partner to pay the expenses but frm has paid, therefore partners capital account will be debited and cash/bank account is credited.(as cash goes out.)
Regards.
Here is your answer,
Expenses borne by partner means, he will have to personally bear the expenses as its his responsibility, therefore no entry will be passed for this, but when some remuneration is given to partner to borne the expenses, then his capital account is credited and realisation account will be debited with the same amount of remuneration.
But when it is said that expenses are borne by firm and paid by partner, then it means that responsibility to pay the expenses was of firm but actually has been paid by partner, therefore partners capital account is credited and realisation account is debited.
Another case is when expenses ae born and paid by the partner, then there will be no any entry.
As asked by you, expenses paid by firm and borne by partner, it means it was responsibility of partner to pay the expenses but frm has paid, therefore partners capital account will be debited and cash/bank account is credited.(as cash goes out.)
Regards.