Question

Goods costing 1000 given as charity rupees 2000 used by proprietor for personal use rupees 2000 distributed as free sample

Answer 1

Answer:

charity a/c         dr 1000

    to purchases a/c         1000

drawings a/c      dr 2000

     to purchases a/c            2000

advertisement(free sample)a/c      dr 2000

                         to purchases a/c                  2000

Explanation:

purhases a/c is credited because the stock of goods ones purchased is now being given away and the stock gets reduced . thus to reduce purchases we credit it.