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Goods given as charity credited to :
- a)Charity A/c
- b)Purchase A/c
- c)Drawings A/c
- d)Sales A/c
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawi...
Explanation:
When goods are given as charity, it means that the business entity is giving away its products without expecting any payment in return. In such cases, the goods should be credited to the Purchase Account.
Reasons why goods given as charity should be credited to Purchase Account:
1. Charity is not a part of the normal business operations.
2. The cost of goods given as charity is a direct expense and should be charged to the Profit and Loss Account.
3. The Purchase Account represents the cost of goods purchased or acquired by the business, and it is used to calculate the cost of goods sold.
4. By crediting the Purchase Account, the cost of goods given as charity is deducted from the total cost of goods purchased, which results in a lower cost of goods sold and a higher gross profit.
Conclusion:
When goods are given as charity, they should be credited to the Purchase Account. This will ensure that the cost of goods given as charity is properly accounted for and deducted from the total cost of goods purchased.
When goods are given as charity, it means that the business entity is giving away its products without expecting any payment in return. In such cases, the goods should be credited to the Purchase Account.
Reasons why goods given as charity should be credited to Purchase Account:
1. Charity is not a part of the normal business operations.
2. The cost of goods given as charity is a direct expense and should be charged to the Profit and Loss Account.
3. The Purchase Account represents the cost of goods purchased or acquired by the business, and it is used to calculate the cost of goods sold.
4. By crediting the Purchase Account, the cost of goods given as charity is deducted from the total cost of goods purchased, which results in a lower cost of goods sold and a higher gross profit.
Conclusion:
When goods are given as charity, they should be credited to the Purchase Account. This will ensure that the cost of goods given as charity is properly accounted for and deducted from the total cost of goods purchased.
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Community Answer
Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawi...
Because in charity we donate goods which is purchased from creditors
and when we donate goods from stock then purchase will reduce
and when we donate goods from stock then purchase will reduce
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Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer?
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Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer?.
Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods given as charity credited to :a)Charity A/cb)Purchase A/cc)Drawings A/cd)Sales A/cCorrect answer is option 'B'. Can you explain this answer?.
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