Recording of Transactions – I · Class 11 · CBSE · Commerce Accountancy
Goods costing Rs. 10,000 were given away as charity. Which journal entry is correct?
Practice question from Recording of Transactions – I (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-7987B0
Goods costing Rs. 10,000 were given away as charity. Which journal entry is correct?
- A.Debit Charity Account by Rs. 10,000; Credit Purchases Account by Rs. 10,000Correct answer
- B.Debit Charity Account by Rs. 10,000; Credit Cash Account by Rs. 10,000
- C.Debit Purchases Account by Rs. 10,000; Credit Charity Account by Rs. 10,000
- D.Debit Drawings Account by Rs. 10,000; Credit Charity Account by Rs. 10,000
Solution
When goods are given away as charity, charity is an expense (debited), and since goods are going out for a purpose other than sale, the Purchases account is credited to reduce the cost of purchases.
More from Recording of Transactions – I
- Which of the following vouchers is prepared for recording a cash purchase of goods?
- What is the primary book of original entry in which all business transactions are recorded in chronological order?
- Machinery purchased for cash is recorded in the Journal with which of the following entries?
- Which of the following accounts must be credited when a business owner withdraws goods for personal use?
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