ICAEW AF · Chapter 3 · Question 4 of 11
A sole trader takes goods that cost the business £640 for personal use. What is the double entry to record this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Debit Drawings £640, Credit Purchases £640
Explanation
Goods taken by the owner are drawings, so the drawings account is debited. The goods were never sold, so revenue is not credited; instead purchases are credited at cost to remove the goods from the cost of goods available for sale. No cash has moved.
More Double entry, books of prime entry and the trial balance MCQs
- Q6The following balances have been extracted from the ledger of a sole trader at the year end: Non-current assets £48,000 Inventory £6,200…
- Q7Which of the following errors would cause the totals of a trial balance to disagree?
- Q8A business operates an imprest petty cash system with a float of £300. During the month, petty cash vouchers totalling £241.60 were paid…
- Q9A sole trader's net assets were £62,000 at the start of the year and £71,500 at the end. During the year the owner introduced additional…
- Q10For which of the following would the journal normally be used as the book of prime entry?