Question

Goods given as charity should be credited to _________.

• A. purchase account
• B. charity account
• C. sales account
• D. trading account

Answer 1

Answer: (A)

purchase account

Purchases will be credited if goods are given as charity. When accounting for goods given as charity, purchases are reduced with the exact cost of goods contributed. The amount is reduced from purchases in the trading account. It is shown as an expense on the debit side of the income statement.