Goods is an inventory/stock is a debit item and crediting the ledger reduces the amount of it.
Secondly, withdrawal for personal use by proprietor will be expensed under an account called “drawings”.
Accounting Entry:
Dr: drawings a/c with Rs 8,000
Cr: Inventory/Stock a/c with Rs 8,000
The worth (Rs 10,000) will only be considered when sales occur.
Explanation: Drawings Account is debited because it decreases the balance of Capital Account and Purchases Account is credited because it decreases the balance of Purchases(Expenses) Account.
The proprietor of the business has withdrawn funds from their account for personal use. They believe that the funds belong to them personally. In such circumstances, the bank account should be credited to the proprietors’ account.
The proprietor should be credited to the account of the proprietor.
How withdraw goods for personal use journal entry is done?
Dr Drawings 8000
Cr Stock 8000
Drawings can’t be at profit to the company.
