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Oct 19, 2018 7:55 PM UTC
Solved

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

I am not fully understanding why a loan that we give to an employee would be an asset? It is money we are out up front and (hopefully) paid back at a later date. I would assume it is an A/R but maybe there is some other way to classify it. If there is, how would I change this account?

Rustler
RustlerAnswer
Oct 19, 2018 7:56 PM UTC

If you made the loan to the employee, then yes that is correct

17 replies

Rustler
RustlerAnswer
Oct 19, 2018 7:56 PM UTC

If you made the loan to the employee, then yes that is correct

Oct 19, 2018 7:56 PM UTC
If we made the loan then it is correct as an asset?
Oct 19, 2018 7:56 PM UTC
Yes Employee Loans (or Advances) are an Other Asset (Other Current Asset if it will be repaid within 1 year).  It is similar to Accounts Receiveable but that is for amounts due from customers.

I hope this was helpful.
Oct 19, 2018 7:56 PM UTC
That cleared it up. Thanks!