Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 5 - No. 16)
What are the effects when goods are withdrawn for personal use?
Drawings account is debited and Purchases account is credited
Drawings account is debited and Purchases account is debited
Drawings account is debited and the Drawings account is credited
Drawings account is credited and Purchases account is debited
Explanation
The drawings account is debited to reflect the reduction in the owner's equity. The purchases account is credited since the goods are no longer available for sale, reducing the business's inventory.
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