Fatima withdraws goods from the business for personal use. The accounting treatment is to debit ____
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
Correct Answer: Option B
Explanation:
When Fatima withdraws goods for personal use, this is considered a drawing, not a business expense. In accounting, drawings reduce the owner's equity, and the business's inventory (stock) is also reduced.
The correct double entry:
Debit Drawings Account – to reflect the reduction in owner’s equity.
Credit Stock Account (or Purchases, depending on the system) – to reduce the value of goods/assets in the business.
When Fatima withdraws goods for personal use, this is considered a drawing, not a business expense. In accounting, drawings reduce the owner's equity, and the business's inventory (stock) is also reduced.
The correct double entry:
Debit Drawings Account – to reflect the reduction in owner’s equity.
Credit Stock Account (or Purchases, depending on the system) – to reduce the value of goods/assets in the business.