Journal Entry for Withdrawing Goods for Personal Use

When goods are withdrawn from the business for personal use, it is treated as a withdrawal by the owner and not as a purchase by the business. The following journal entry is recorded in the books of accounts:

Date Particulars Debit Credit
Personal Account 6,000
Drawings Account 6,000

Explanation of the Journal Entry

The journal entry for withdrawing goods for personal use involves two accounts - Personal Account and Drawings Account.

1. Personal Account:

- Personal Account is debited with the value of the goods withdrawn.
- The value of goods withdrawn is accounted for as a debit to Personal Account because the owner has taken goods for personal use, and it is considered as a withdrawal of capital.

2. Drawings Account:

- Drawings Account is credited with the value of the goods withdrawn.
- The value of goods withdrawn is accounted for as a credit to Drawings Account because it is a personal transaction of the owner, and it reduces the owner's capital.

Conclusion

In conclusion, withdrawing goods for personal use is considered as a withdrawal of capital by the owner and not as a purchase by the business. Therefore, the journal entry involves debiting Personal Account and crediting Drawings Account.