journal entry- goofs worth RS.500/- taken for personal use.
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➡️Its Drawing A/C Dr. 500
To Inventory A/C 500
➡️Its Drawing A/C Dr. 500
To Inventory A/C 500
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Journal Entry:
Drawings A/C Dr Rs. 500
To Purchases A/C Rs.500
(being goods taken for personal use)
Explanation :
When goods are withdrawn for personal use, purchased goods decreases.
Therefore , purchases which actually shows debit balance needs to be CREDITED.
Goods are taken by the proprietor for personal use.
It is treated as drawings and drawings is an asset to the business. Hence DEBITED.
sujiritha95:
is drawings a asst to the company
its ok, i dont think so drawings is an asset
Drawings is personal A/c , where owner is receiver of goods , therefore its debited
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