Probably a very basic question. I'm a bookkeeper with a new client who is in search of a new accountant (I've told him to get on with this) so there is a knowledge gap here. His accounts have been neglected for some time...
The Director's Loan Accounts are in credit as due to a mileage claim for the year (2 directors). However they've also made greater monthly 'dividend' payments to their personal accounts on top of payroll. These have been posted to the dividend account.
Am I correct in treating the whole lot as director's loan to effectively net the two off, thereby making a zero balance on DLA and lower dividends? Or is there any issue as to when the dividends are declared (i.e. dates that should be on the minutes and vouchers) to avoid building up the loan accounts too high? I'm not sure if this matters at all between year ends and if the postings on the software need to be a specific way, or whether I can simply journal it all at the year end date.
Apologies if any of this is unclear or sounds daft,