July 29, 2020
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WHAT IS JOURNAL & LEDGER?

WHAT IS JOURNAL & LEDGER?

Cash Withdrawn for Personal Use: Cash withdrawn for personal use is termed as ‘Drawing’. The entry passed is:

Drawing Journal Entry

Goods Taken for Personal Use: Goods taken for personal use is also a drawing. The entry passed is:

Drawings of goods Journal Entry

Note: the cost of goods withdrawn is debited to the Drawings Account and credited to Purchases Account. It is not considered as a sale but as a decrease in purchases as no profit is earned on such goods.

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