Current account of partners

Current account of partners

Current account of partners is an account that is used only for cash receipts and payments of partners and shareholders with the company.

Uses of partners’ current account:

The current account of the partners is an account with the nature of creditor and debtor. This means that once the subset of the total account of other accounts receivable and once the subset of the total account of other accounts payable are defined.
In fact, being a creditor of this account indicates the company’s indebtedness to the shareholders, and being a debtor of this account indicates the indebtedness of the shareholders to the company.

This account is an auxiliary account for accountants that shows the financial exchange between the company and partners.

When receiving money from the shareholder:

(Example: deposit by Mr. * to the company’s national bank account)

Riyali Bank / National Bank

Current partners / Mr.*

When paying money to the shareholder:

(Example: payment to Mr. * from the company’s national bank account) or the withdrawal of the partners:

Current partners / Mr. *

Riyali Bank / National Bank

Unauthorized registrations with partners’ current account:

The partner’s current account should not be used for activities such as collecting claims, paying debts, and also paying expenses. In other words, the following registrations through the partner’s current account are not allowed.

costs (bad)

current partners

buy (bad)

current partners

current partners (bad)

Accounts receivable

paid account (bad)

current partners

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