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Level 7
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
  • 17 replies
  • 121 views

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

17 replies

Rustler
RustlerAnswer
Level 15
October 19, 2018

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

Level 7
October 19, 2018
If we made the loan then it is correct as an asset?
Level 7
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.
Level 7
October 19, 2018
That cleared it up. Thanks!