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arkvalleyinfo
October 19, 2018
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

  • October 19, 2018
  • 2 replies
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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?

Best answer by Rustler

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

2 replies

Rustler
RustlerAnswer
October 19, 2018

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

    A
    arkvalleyinfoAuthor
    October 19, 2018
    If we made the loan then it is correct as an asset?
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    arkvalleyinfoAuthor
    October 19, 2018
    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.
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      arkvalleyinfoAuthor
      October 19, 2018
      That cleared it up. Thanks!
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