The withdrawal of goods from the business by the proprietor should be debited to ______________.

Drawing account

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Purchase account

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Capital account

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P & L A/c

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Solution

The correct option is A Drawing account
An account is set up in the balance sheet to record the transactions taken place of money removed from the company by the owners. This is known as the drawings.
In the drawing account, the amount withdrawn by the owner is recorded as a debit. If goods are withdrawn, the amount recorded is at cost value.
The journal entry will be as follows:
Drawings a/c Dr. xx
To Purchases a/c xx

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Q. Goods withdrawn by the proprietor from business is debited to the Drawings A/c.

State whether the following statements are true or false:

(1) A journal voucher is must for all transactions recorded in the journal.
(2) Journal is a book of secondary entry.
(3) Narration is not necessary for each and every journal entry.
(4) Every transaction is recorded first in the journal.
(5) Live Stock A/c is a Nominal A/c.
(6) Bank of Maharashtra A/c is a Nominal A/c.
(7) Brokerage paid on sale of goods is debited to brokerage A/c.
(8) If the goods are sold the entry should be recorded in the journal.
(9) Goods withdrawn by the proprietor from business is debited to the Drawing A/c.
(10) Cash discount does not appear in the books of accounts.
(11) If rent is paid to the landlord, landlord’s A/c should be debited.
(12) Book keeping records monetary transactions only.
(13) Drawings made by the proprietor increases his capital.
(14) Premium paid on the life policy of the proprietor should be debited to insurance premium account.

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