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(i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)?
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(i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) o...
Explanation:
When employees take inventory for personal use, it is considered as an expense for the company. Therefore, the company needs to make an entry to account for this expense.
The entry made for this transaction is:
Salaries A/c Dr. 75,000
To Purchase A/c 75,000
The above entry implies that the company is debiting the Salaries account for the amount of inventory taken by the employees. At the same time, the company is crediting the Purchase account for the same amount.
The Purchase account is involved in this transaction because it is an expense account that records the cost of goods purchased by the company. When the employees take inventory worth 1,00,000, the company needs to deduct this amount from the Purchase account since the goods were not used for business purposes.
In summary, the Purchase account is involved in this transaction because it is an expense account that records the cost of goods purchased by the company. When employees take inventory for personal use, the company needs to make an entry to account for this expense, which involves debiting the Salaries account and crediting the Purchase account.
When employees take inventory for personal use, it is considered as an expense for the company. Therefore, the company needs to make an entry to account for this expense.
The entry made for this transaction is:
Salaries A/c Dr. 75,000
To Purchase A/c 75,000
The above entry implies that the company is debiting the Salaries account for the amount of inventory taken by the employees. At the same time, the company is crediting the Purchase account for the same amount.
The Purchase account is involved in this transaction because it is an expense account that records the cost of goods purchased by the company. When the employees take inventory worth 1,00,000, the company needs to deduct this amount from the Purchase account since the goods were not used for business purposes.
In summary, the Purchase account is involved in this transaction because it is an expense account that records the cost of goods purchased by the company. When employees take inventory for personal use, the company needs to make an entry to account for this expense, which involves debiting the Salaries account and crediting the Purchase account.
Community Answer
(i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) o...
The employees took the inventory, the purchase account has been involved. Had it been withdrawn by the owner Drawings a/c would be involved and since this is not a sale as the CP was adjusted from their salary and no profit was made by the company. And to make that entry in the books they used the term purchase.
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(i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)?
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(i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about (i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for (i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)?.
(i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about (i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for (i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)?.
Solutions for (i) Employees had taken inventory worth 1,00,000 (Cost price 75,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month. Please explain how purchases account is involved. Solution: Salaries A/c Dr. 75,000 To Purchase A/c 75,000 (Being entry made for inventory taken by employees)? in English & in Hindi are available as part of our courses for CA Foundation.
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