Interested to Buy Any Domain ? << Click Here >> for more details...
What is the difference between Loan and Advance?
- 16 Answers
- 154913 Views
- Banking, Syndicate Bank, I also Faced
- E-Mail Answers
Answer Posted / h.r. sreepada bhagi
Loan refers to money lent to a borrower for Short-Term,
Long-Term or for unspecified period (Working Capital
facility which is renewed every year). Loan carries a
specific rate of interest as agreed between the lender & the
borrower and the terms of the agreement. A loan may be for
general purpose (Say working capital) or specific purpose
(Equipment loan, Export Packing Credit, etc.)
On the other hand Advance refers to money paid in advance to
any one to meet a specific future expense, liability or to
tide over some specific requirements. Advances paid by an
employer to employee may be to meet certain expenses like
official travel, or to meed some personal needs in the form
of salary advance. Advance paid to meet official expenses
will be settled once it's expended for the said purpose,
salary advance may be recovered by deduction form monthly
salary as per the policy of the company.
Again advance may be paid to discharge a future liability.
For example :Income Tax paid in Advance. Again advance may
carry interest - The company may charge nominal interest on
the advance paid to it's employees. In case of Income Tax
advances, the Government will written the advance in excess
of actual tax liability with interest to the asessee who has
paid advance tax.
Again there may be payment of money in advance by a buyer to
a supplier of goods & there may be a clause in the purchase
order that, the supplier will be liable to pay interest at a
specified rate in the event of delay in supply as per the
terms of Purchase Order accepted by them.
One major difference between the two is :Loan is always
under a contractual arrangement between the lender and the
borrower & it carries interest, but generally advance is
made with out agreement and may not carry interest in all cases.
| Is This Answer Correct ? | 100 Yes | 19 No |
Post New Answer View All Answers
What is meant by daily accrual and booking?
What is an accounting transaction?
Tell me about an invoice discrepancy you discovered and how you resolved it
Where do generally accruals appear on the balance sheet?
what is the Differed Tax Liability & How it is calculate ?
Mention whether the account "cash" will be credited or debited when a company pays a bill?
Explain compound journal entry.
what is use of cost center category in tally ? why & when use this ? what is benfit ?
What is the purpose of financial statements?
hai everone,can anyone send me the accounting ,finance,general interview questions for mba freshers plz.....urjent
PLZZZZZZZZZZZZ HELP ME FOR THE PREPARATION OF TEST JR.EXECUTIVE (ADMIN)IN ATM IAM APPEARED 1ST TIME IN THIS TEST MY TEST CENTER IS RAWALPINDI MY CONTACT NO IS 03338907330
Mohan sold goods on 1st sep 2009 for the rs 200000/- to sohan immediatly accepted a 3 month bill.on the due date sohan request for the renewal of the bill for further peirod of two month .mohan agree to pay interest @9% per annum to be inculuded in the new bill . determine the amount of new bill?
How Can We Justify the,Real A/C & Nominal A/C?
what's the difference between impress cash account and petty cash account
under the modified cash basis of accounting, most revenues and expenses are recognized on the cash basis. Which one of the following items is an EXCEPTION to this accounting practice? a.Advertising b.Professional Fees. c.Supplies d.Rent
