Question

Which account will be credited when goods are taken for personal use

Answer 1

Answer:

cash account

Explanation:

in a business the owner can take for his personal use (that is called as drawings(

Answer 2

ANSWER :

★ Purchases Account will be credited when goods are taken for personal use.

❍ The journal entry for this transaction is :-

• $: \mapsto : \: \sf{ Drawings \: \: A/C \: \: Dr. \: \: \: (Amount)} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \: \: \: \: \: \: \: \: \: \: \: \: \: \sf{ To \: \: Purchases \: \: A/C \: \: \: \: \: \: \: \: \: \: \: \: \: (Amount) }$

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EXPLANTION :

• ✎ Goods or cash withdrawn by the proprietor for personal use or any private purpose is known as Drawings.

• ✎ In the transaction, goods taken by the proprietor for personal use, the two aspects are :- Drawings A/C and Purchases A/C.

• ✎ When the proprietor of a business withdraws goods for personal use, the inventory from Purchases of the business decreases. Purchases A/C is an Expenses Account. According to the rule of Debit and Credit under American Approach or Modern Approach, when there is a decrease in expenses, it is 'credited'. Therefore, Purchases A/C will be Credited.

• ✎ On the other hand, Drawings A/C comss under Capital Account. According to the rule of Debit and Credit under American Approach or Modern Approach, when there is a decrease in capital, it is 'debited'. Therefore, Drawings A/C will be Debited.