Multiple choice

Goods worth Rs. 1,000 taken by a proprietor for personal use should be credited to which of the following accounts?

  1. Sales account

  2. Purchase account

  3. Expenses account

  4. Proprietor's personal account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When a proprietor takes goods for personal use, it is treated as drawings. The entry is to debit Drawings account (or Proprietor's account) and credit Purchases account to reduce the purchases figure. This reduces the cost of goods sold and adjusts the trading account. Sales account is unaffected, and expenses account is not relevant for this transaction.

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