Question

charity of goods is?

A.Expenses
B.profit
c.loss
d.none of the above ​

Answer 1

Answer:

Purchases will be credited if goods are given as charity. When accounting for goods given as charity, purchases are reduced with the exact cost of goods contributed. The amount is reduced from purchases in the trading account.

Answer 2

The correct answer is Option(d) none of the above.

• As we know that the purchase of goods will be credited as it is given for donation or a charity.
• It will affect the Trading Account.
• It will not affect the production as it is given by choice.
• Many of the big organizations give goods as a charity, to help the economy.
• It is not an expense that needs to be incurred.
• It is neither an income nor a gain of the organization.
• The journal entry for this -

         Charity A\c Dr.

                 To Purchases A\c Cr.

        (Being goods given as charity)