journal entry for purchased a fan for proprietor's house... Rs. 1,200
What should be debited and what should be credited?
Answers
to cash a/c-1200
Drawings. A/c Dr. 1200
To Cash A/c. 1200
(Being fan purchased for personal use)
Explanation:
In the given question the proprietor purchase the fan for thousand two hundred rupees this purchase was made for his personal uses therefore making it a drawing. Drawings can be defined as a situation in which the owner withdraws or uses the firm's money for his or her personal uses. Here in our case donor has bought the fan for his house therefore making it a drawing.
Drawings are a liability for the proprietor therefore since we are posting are journal entry from the point of view of the firm it is is a current asset for us because now the proprietor owes to the firm so we debit drawings account and credit cash account as cash going out.
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