PRC-1 · Chapter 8 · Question 96 of 100
The proprietor withdrew Rs. 10,000 in cash for personal use. This was correctly recorded in the cash book but debited to the Miscellaneous Expenses account. What is the correcting journal entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Drawings Rs. 10,000, Credit Miscellaneous Expenses Rs. 10,000
Explanation
The withdrawal must be charged to Drawings, not an expense account. The correction removes the false expense (Credit) and places it into Drawings (Debit).
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