Question

the owner manager bought a computer for personal use. the invoice was given to the accountant who recorded it as an asset of the business?

Answer 1

Answer:

Accountant wrongly recorded the computer as assets. of business because computer purchased by proprietor for personal use so it is drawing

Answer 2

In this question, we are asked to tell the invoice recorded it as an asset of the business, is it correct or not.

• The manager has bought a computer for its personal use, so it is a drawing not an asset of the company.
• As the accountant has recorded it as an asset which is wrong as it will be recorded as a drawing.
• An accounting record called a drawing account is kept keeping track of the funds and other assets that business owners withdraw. Businesses that are taxed as sole proprietorships or partnerships typically use drawing accounts.
• In the context of accounting, drawing means removing money out of a company's holdings or from an account for personal use. When a business owner is a partner or a lone proprietor, they frequently use drawing accounts. The term "drawing" can also refer to things that are taken out of a firm for private use.
• A resource having economic worth that a person, business, or nation possesses or controls with the hope that it would someday be useful is referred to as an asset. The balance sheet of a business lists assets. They are categorized as current, fixed, financial, and intangible.

PROJECT CODE #SPJ2

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