PRC-1 · Chapter 8 · Question 47 of 100
Goods costing Rs. 2,000 were taken by the owner for personal use but no entry was made. What is the correcting journal entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit Drawings Rs. 2,000, Credit Purchases Rs. 2,000
Explanation
Withdrawal of goods for personal use is an error of omission if unrecorded. It requires debiting Drawings and crediting Purchases to reduce the cost of goods available for sale.
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