Which entry records goods withdrawn by the proprietor for personal use?
Correct answer: A. Debit drawings and credit purchases
- A. Debit drawings and credit purchases
- B. Debit purchases and credit drawings
- C. Debit capital and credit sales
- D. Debit cash and credit drawings
Explanation
Goods taken for private use reduce the goods available for business, so purchases are credited. The proprietor's drawings account is debited because personal withdrawals increase drawings.
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About Double Entry and Books of Prime Entry
Double entry records every transaction with equal debit and credit entries, based on the accounting equation and the classification of assets, liabilities, capital, income and expenses. Books of prime entry include the sales, purchases, returns and cash books, journal, and source documents used before transactions are posted to ledger accounts.
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