Answered: Inventory taken by the owner of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Inventory taken by the owner of the entity for personal use, will affect which of the following accounts and subsidiary journal, if the entity uses the periodic inventory system?

Select one:

The drawings account will decrease, while the purchases account increases, and the inventory taken by the owner for personal use will be recorded in the general journal at cost price.

The drawings account will increase, while the inventory account will decrease, and the inventory taken by the owner for personal use will be recorded in the general journal at cost price.

The drawings account will decrease, while the inventory account increases, and the inventory taken by the owner for personal use will be recorded in the general journal at cost price.

The drawings account will increase, while the purchases account decreases, and the inventory taken by the owner for personal use will be recorded in the general journal at cost price.

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