Question

Purchased goods for the personal use of the proprietor rs.300 debited to purchases account rectification of it

Answer 1

Explanation:

Right Entry:-

Drawing A/c..........dr. 300

To Cash A/c. 300

Wrong Entry:-

Purchases A/c.........dr. 300

To Cash A/c. 300

Rectified Entry:-

Drawing A/c............dr. 300

To Purchases A/c.

Answer 2

Answer:

Transaction: Purchased goods for the personal use of the proprietor debited to purchases account.

Journal Entry:

Drawings A/c---------------------------Dr    600

           To Purchases A/c                           600

(Being rectification entry passed by crediting purchases and debiting drawings)

Explanation:

As per business entity concept, personal use and business uses are different.

Anything used for personal use is debited to drawings and credited to purchases or cash A/c.

As amount is debited to purchase a/c, double amount is credited to purchases a/c by debiting drawings A/c