PRC-1 · Chapter 1 · Question 94 of 100
If the proprietor of 'Fresh Foods' takes home grocery items from the business inventory for a family dinner, what is the correct double entry to record this event?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Drawings, Credit Purchases
Explanation
When an owner withdraws trading inventory for personal use, the business's purchases (or inventory) must be reduced (Credit Purchases), and the owner's drawings must be increased (Debit Drawings).
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