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Goods worth Rs. 10,000 were withdrawn by the proprietor for his personal use.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 'C'. Can you explain this answer?
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Verified Answer
Goods worth Rs. 10,000 were withdrawn by the proprietor for his person...
When the proprietor withdraws goods for personal use of Rs 10,000 it should be credited/deducted from the stock while calculating cost of goods sold and hence are deducted from purchases.
Most Upvoted Answer
Goods worth Rs. 10,000 were withdrawn by the proprietor for his person...
Explanation:
When the proprietor withdraws goods from his business for personal use, it is known as a withdrawal or a draw. The account that needs to be credited in this case is the Purchases Account. Here's why:
- Purchases Account: This account tracks all the purchases made by the business. When the proprietor withdraws goods for personal use, it is considered as if the business has made a purchase for the same amount. Hence, the Purchases Account needs to be credited to reduce the balance of the account.
- Sales Account: This account tracks all the sales made by the business. Since the proprietor has not sold the goods, the Sales Account is not affected.
- Drawing Account: This account is used to record the withdrawals made by the proprietor for personal use. However, it is not the correct account to credit in this case.
- Expenses Account: This account tracks all the expenses incurred by the business. Since the withdrawal of goods for personal use is not an expense, this account is not affected.
Therefore, the correct account to be credited when goods are withdrawn by the proprietor for personal use is the Purchases Account.
When the proprietor withdraws goods from his business for personal use, it is known as a withdrawal or a draw. The account that needs to be credited in this case is the Purchases Account. Here's why:
- Purchases Account: This account tracks all the purchases made by the business. When the proprietor withdraws goods for personal use, it is considered as if the business has made a purchase for the same amount. Hence, the Purchases Account needs to be credited to reduce the balance of the account.
- Sales Account: This account tracks all the sales made by the business. Since the proprietor has not sold the goods, the Sales Account is not affected.
- Drawing Account: This account is used to record the withdrawals made by the proprietor for personal use. However, it is not the correct account to credit in this case.
- Expenses Account: This account tracks all the expenses incurred by the business. Since the withdrawal of goods for personal use is not an expense, this account is not affected.
Therefore, the correct account to be credited when goods are withdrawn by the proprietor for personal use is the Purchases Account.
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Community Answer
Goods worth Rs. 10,000 were withdrawn by the proprietor for his person...
Purchase a/c will be ceedited because he withdraw the good for its personal use....if he credited sales price he face loss...( sale price = cost price + profit)....and no business man likes the loss.... Hope it helps u
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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 'C'. Can you explain this answer?
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