PRC-1 · Chapter 10 · Question 14 of 100
The proprietor of a business withdraws goods costing Rs. 4,000 for personal use. No entry was made. What adjusting entry is required?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Drawings Rs. 4,000, Credit Purchases Rs. 4,000
Explanation
Goods taken for personal use (drawings) are recorded at cost. The adjusting entry reduces the purchases expense and increases drawings.
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