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CBSE Class 11-commerce Answered

Seeta, the proprietor of Ram and Company purchased furniture for her home. She made the payment by issuing a cheque from the account of Ram and Company. Her accountant debited the Drawing A/c. But Seeta was of the opinion that Fixed Assets A/c should be debited. Is she right? Answer with reason.
Asked by Topperlearning User | 09 Jun, 2016, 12:14: PM
answered-by-expert Expert Answer

No. Seeta is not right because as per the business entity concept, business has a distinct entity from its owners. It implies that all the business transactions are recorded from the business point of view and not owners.

Here, furniture purchased by Seeta is for her personal use (i.e. personal use of the owner) and therefore Drawing A/c has been debited. 

Answered by | 09 Jun, 2016, 02:14: PM
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