PRC-1 · Chapter 3 · Question 63 of 100
The proprietor of a grocery store takes home Rs. 2,000 worth of food items for personal use. What is the correct journal entry to post this to the ledgers?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit Drawings Rs. 2,000; Credit Purchases Rs. 2,000
Explanation
When the owner withdraws trading goods for personal use, it reduces the purchases expense at cost price. Therefore, Drawings are debited and Purchases are credited.
More Ledgers and Trial Balance MCQs
- Q65In manual bookkeeping, 'balancing an account' specifically refers to the process of:
- Q66What is the primary difference between the General Ledger and a subsidiary ledger (such as the Receivables Ledger)?
- Q67At the end of the month, the total of the Purchases Day Book is Rs. 120,000. How is this periodic total posted to the General Ledger?
- Q68The Sales Day Book shows a monthly total of Rs. 350,000. What is the correct double-entry for posting this total to the General Ledger?
- Q69The total of the 'Discount Allowed' column in the cash book is Rs. 4,500 for the period. Where is this total posted in the General Ledger?