alleryGoods costing ₹10,000 used by proprietor personally:
ALess from purchases account
BAdd to purchases account
CTreat as direct expense
DNo accounting required
Answer & Solution
Correct answer: A. Less from purchases account
1. Personal use of goods is a withdrawal in kind.
2. Reduce purchases by ₹10,000 to keep cost of goods sold accurate.
3. Increase drawings by ₹10,000 (reduces capital).
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.4 personal use_
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