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Mr. Kapoor, the proprietor of Kapoor Stores, withdrew goods costing Rs 6,000 from the business for his personal use. The correct journal entry in the books of the business is:

The correct entry debits Drawings A/c and credits Purchases A/c for Rs 6,000. Withdrawal of goods by the proprietor is a drawing that reduces capital, and the goods leave the business at cost, so the Purchases account is credited rather than Cash.

  1. ADrawings A/c Dr. 6,000 To Purchases A/c 6,000Correct
  2. BPurchases A/c Dr. 6,000 To Drawings A/c 6,000
  3. CCapital A/c Dr. 6,000 To Sales A/c 6,000
  4. DDrawings A/c Dr. 6,000 To Cash A/c 6,000

Explanation

Goods taken by the proprietor are a withdrawal, so Drawings A/c is debited as it reduces the owner's equity. The Purchases (or stock) account is credited because goods have gone out of the business at cost. Option B reverses the debit and credit. Option D wrongly treats it as a cash withdrawal, although no cash was paid.

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