Question

Goods taken by proprietor for domestic use should be credited to ___________.

• A. sales account
• B. proprietor's personal expenses
• C. purchases account
• D. expenses account

Answer 1

The correct option is C purchases account

The journal entry of the goods taken by the proprietor for domestic use is:

Drawing account Dr.

To Purchases account

The goods taken by the proprietor for personal use, reduces the inventory of the business. Hence,it is placed on a temporary drawings account. It reduces the Owner's equity account. It is not an expense of the business.