Question

A sole trader took costing Rs. 1000 from stock for his own use. The normal selling price of the goods is Rs. 1500. Which of the following journal entries would correctly record this? A) Dr. Drawing A/c and Cr. Sales A/c by Rs. 1500 B) Dr. Drawing A/c and Cr. Purchases A/c by Rs. 1000 C) Dr. Drawing A/c and Cr. Purchases A/c by Rs. 1500 D) Dr. Sales A/c and Cr. Drawing A/c by Rs. 1000

Answer 1

The correct journal entry to record the sole trader taking goods costing Rs. 1000 from stock for his own use, with a normal selling price of Rs. 1500, would be option A) Dr. Drawing A/c and Cr. Sales A/c by Rs. 1500.

Step-by-step explanation:

The correct journal entry to record the sole trader taking goods costing Rs. 1000 from stock for his own use, with a normal selling price of Rs. 1500, would be option A) Dr. Drawing A/c and Cr. Sales A/c by Rs. 1500.

In this journal entry, we debit the Drawing A/c to record the goods being taken out of the business for personal use, and credit the Sales A/c to reflect the loss of potential sales revenue.

This journal entry accurately records the situation and maintains the integrity of the accounting records.