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Goods worth Rs. 10,000 were withdrawn by the proprietor for his personal use. The account to be credited is
- a)Sales A/c
- b)Drawing A/c
- c)Purchases A/c
- d)Expenses A/c
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Goods worth Rs. 10,000 were withdrawn by the proprietor for his person...
Correct answer is C :
drawings a/c ..dr. 10,000
To purchases a/c. 10,000
drawings a/c ..dr. 10,000
To purchases a/c. 10,000
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Community Answer
Goods worth Rs. 10,000 were withdrawn by the proprietor for his person...
Explanation:
When the proprietor withdraws goods for personal use, it is considered as a withdrawal from the business and needs to be recorded in the books of accounts. The account to be credited in this case is the Drawing A/c.
Reasons:
1. Drawing A/c: The Drawing A/c is a personal account of the proprietor. It is used to record the withdrawals made by the proprietor for personal use. These withdrawals can be in the form of cash, goods, or any other assets. By crediting the Drawing A/c, we are reducing the value of the proprietor's capital in the business.
2. Sales A/c: The Sales A/c is used to record the revenue generated from the sale of goods or services. However, in this case, the goods were withdrawn by the proprietor for personal use and not for sale. Therefore, it would be incorrect to credit the Sales A/c for this transaction.
3. Purchases A/c: The Purchases A/c is used to record the cost of goods purchased for resale. In this case, the goods were not purchased for resale but were withdrawn by the proprietor for personal use. Therefore, it would be incorrect to credit the Purchases A/c for this transaction.
4. Expenses A/c: The Expenses A/c is used to record the expenses incurred in the normal course of business operations. However, the withdrawal of goods for personal use by the proprietor is not considered as an expense of the business. Therefore, it would be incorrect to credit the Expenses A/c for this transaction.
Hence, the correct account to be credited in this case is the Drawing A/c.
When the proprietor withdraws goods for personal use, it is considered as a withdrawal from the business and needs to be recorded in the books of accounts. The account to be credited in this case is the Drawing A/c.
Reasons:
1. Drawing A/c: The Drawing A/c is a personal account of the proprietor. It is used to record the withdrawals made by the proprietor for personal use. These withdrawals can be in the form of cash, goods, or any other assets. By crediting the Drawing A/c, we are reducing the value of the proprietor's capital in the business.
2. Sales A/c: The Sales A/c is used to record the revenue generated from the sale of goods or services. However, in this case, the goods were withdrawn by the proprietor for personal use and not for sale. Therefore, it would be incorrect to credit the Sales A/c for this transaction.
3. Purchases A/c: The Purchases A/c is used to record the cost of goods purchased for resale. In this case, the goods were not purchased for resale but were withdrawn by the proprietor for personal use. Therefore, it would be incorrect to credit the Purchases A/c for this transaction.
4. Expenses A/c: The Expenses A/c is used to record the expenses incurred in the normal course of business operations. However, the withdrawal of goods for personal use by the proprietor is not considered as an expense of the business. Therefore, it would be incorrect to credit the Expenses A/c for this transaction.
Hence, the correct account to be credited in this case is the Drawing A/c.
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Goods worth Rs. 10,000 were withdrawn by the proprietor for his personal use. The account to be credited isa)Sales A/cb)Drawing A/cc)Purchases A/cd)Expenses A/cCorrect answer is option 'C'. Can you explain this answer?
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