PRC-1 · Chapter 2 · Question 43 of 100
Mr. Tariq, the sole owner of a grocery store, takes home trading inventory costing Rs. 8,000 for his family's personal use. How is this event initially recorded in the books of prime entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) In the General Journal
Explanation
The withdrawal of goods by the owner is a non-cash transaction (so not the cash book) and is not a sale to a customer or a return to a supplier. It is an adjustment (Drawings and Purchases/Inventory) recorded in the General Journal.
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