Question

Goods given away as charity would be credited to _______________.

• A. Sales A/c
• B. Purchase A/c
• C. Charity A/c
• D. Cash A/c

Answer 1

The correct option is B Purchase A/c

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.