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WAEC Financial Accounting 2005 Question 49

Question 49

Double Entry and the Ledger

Where a proprietor withdraws stock for personal consumption, the accounting entries to record the transaction are

  1. A.debit Drawings Account, credit Purchases Account
  2. B.debit Purchases Account, credit Drawings Account
  3. C.debit Sales Account, credit Drawings Account
  4. D.debit Drawings Account, credit Sales Account.
Show the answer and explanation

Answer: A (debit Drawings Account, credit Purchases Account)

Explanation

Goods taken: debit drawings, credit purchases.