Accounting cycles

General Accounting Principles

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The owner of the business takes Rs 100 cash and goods costing Rs 200 for his family. The proper journal entry for this transaction is:

Drawings > debit; cash > credit; purchases > credit

Drawings > debit; cash > credit; merchandise > credit

Drawings > debit; cash > credit; sales > credit

Cash > debit; purchases > debit; drawings > credit

Explanation:

When the owner uses money from business than the account drawing account will debit and cash account will credit.
and if owner uses goods from business than the purchase account will credit
So in the given transaction "The owner of the business takes Rs 100 cash and goods costing Rs 200 for his family". The proper journal entry is:
Drawings > debit; cash > credit; purchases > credit

By: Munesh Kumari

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