Vidyalelo
Commerce · Q89

Accounting

Graduate and Post Graduate · Commerce · question 89

Q89

_____ will be credited if goods are given as charity

A.
Cash
B.
Charity
C.
Purchases
Answer
D.
Sales

Answer: Option C

Solution

Answer: Option C
Solution:
Purchases will be credited if goods are given as charity. When accounting for goods given as charity, purchases are reduced with the exact cost of goods contributed. The amount is reduced from purchases in the trading account. It is shown as an expense on the debit side of the income statement.