Journal Entry For Goods Withdrawn For Office And Personal Use

Goods Withdrawn For Office Use Journal Entry / Goods Used For office Use Journal Entry

When the goods or merchandise withdrawn by sole owners from business for office use or business use, then this Transaction is related with business matters as the goods withdrew for business use or office use of the business.

For example, Mr. A, a sole proprietor, withdrew goods worth Rs. 5000 for office use. Then the entry to record is given below:

                                                                         Purchases a/c  5000

 

                                                                                                 Cash a/c  5000

 

                                                                          (Goods Taken For Office Use)

 

Goods Withdrawn For Private Use Journal

When the goods are withdrawn by sole proprietors or sole owners or partners (in partnership form business) from business for private use or household expenses, then this transaction is related with Drawings Account as it is related with the personal matter of proprietor and has no concern with business dealings.

For Example, if a sole owner withdrew goods worth Rs. 10000 from business for private use or personal use, then the entry to record is shown below:

                                                                           Drawings a/c  10000

 

                                                                                                  Purchases a/c  10000

 

                                                                   (Goods Taken By Owner For His Private Expenses)

 

Drawings is deducted from capital account on balance sheet as it is a Contra Capital Account. Purchases is decreasing so these are deducted from stock in accounting equation.

So, goods taken away by the sole proprietor from business for household expenses or private use is considered as a transaction related with drawings account of owner and we record it separately from the business as the business is a separate legal entity while for office use is not created a drawings account.