PRC-1 · Chapter 8 · Question 83 of 100
During the review of accounting records, it was found that goods of Rs. 90,000 were taken by the owner for personal use, but no entry was passed. Under a periodic inventory system, the correcting entry is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit Drawings Rs. 90,000 & Credit Purchases Rs. 90,000
Explanation
In a periodic system, goods taken for personal use reduce the Purchases account. The entry is a debit to Drawings and a credit to Purchases.
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