CIMA BA3 · Chapter 3 · Question 4 of 10
The owner of a business takes goods costing $600 from inventory for personal use. What is the double entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit Drawings $600, Credit Purchases $600
Explanation
Goods taken for personal use reduce the owner's interest in the business, so drawings is debited. The goods are no longer available for resale, so the cost is removed from purchases with a credit. No sale has taken place and no cash is involved.
More Double entry bookkeeping and the accounting equation MCQs
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