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Zorluk: OrtaTreatment of Owner's Capital, Drawings, and Goods Withdrawn

A sole trader withdrew goods costing ₦28,000₦28,000, which had a selling price of ₦35,000₦35,000, from the business for personal domestic use. What is the correct double entry to record this adjustment?

  1. Debit Drawings account ₦28,000₦28,000, Credit Purchases account ₦28,000₦28,000Cevap
  2. B
    Debit Drawings account ₦35,000₦35,000, Credit Sales account ₦35,000₦35,000
  3. C
    Debit Capital account ₦28,000₦28,000, Credit Sales account ₦28,000₦28,000
  4. D
    Debit Purchases account ₦28,000₦28,000, Credit Drawings account ₦28,000₦28,000

Cevap

Debit Drawings account ₦28,000₦28,000, Credit Purchases account ₦28,000₦28,000
When a proprietor takes goods from the business for personal use, the transaction must be recorded at cost price (₦28,000₦28,000). The Drawings account is debited to reflect the increase in personal drawings, and the Purchases account is credited to reduce the cost of inventory available for sale.

Adım Adım Çözüm

1
Identify the valuation basis for owner's withdrawals of inventory.
Goods withdrawn for personal consumption are valued at cost price (₦28,000₦28,000), because a trader cannot make a profit from themselves.
According to accounting principles, withdrawals are recorded at cost price, ignoring any mark-up or selling price.
2
Determine the account to debit.
Debit Drawings account with ₦28,000₦28,000.
Drawings represent resources taken by the proprietor, which reduces total owner's equity.
3
Determine the account to credit.
Credit Purchases account with ₦28,000₦28,000.
Goods available for resale are reduced when the proprietor takes inventory for private use, so Purchases must be reduced.

Anahtar Kavram

Treatment of Goods Withdrawn by Owner for Personal Use
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Treatment of Owner's Capital, Drawings, and Goods Withdrawn

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