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Paid Rs.700 as rent of the house occupied by the proprietor for personal use​

Sagot :

Samawati

Answer:

see below

Explanation:

In this transaction, Rs. 700 is used to pay for rent that the proprietor uses for personal use. The transaction will be captured in the drawings account. A drawing account is used to track all the money owners take from a business for personal use. The amount taken to pay rent, Rs. 700 will be debited  Drawings A/c.

The transaction will decrease cash ( asset account) by Rs. 700. A decrease in assets is credited. Therefore, the cash account will be credited by Rs.700

The journal entry will be

Drawings A/c Dr.   Rs.700

Cash A/c.                          Cr  Rs.700

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