Which journal is used to record a transaction where the owner withdraws stock for personal use.

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Question restatement: Which journal is used to record a transaction where the owner withdraws stock for personal use?

Option analysis:

a. Sales Journal
- This journal is typically used to record sales of goods on account or for cash sales to customers. It is not appropriate for recording owner withdrawals of stock for personal use, which involves stock equity and owner drawings rather than revenue or sales activity.

b. General Journal
- The General Journal is used for recording miscellaneous or non-routine transactions that do not fit neatly into specialized journals. Owner withdrawals of stock for personal use are a classic example of a transaction that affects equity and requires a general entry to reflect the reduction in inventory and the owner’s drawing (or drawings account) with appropriate debit and credit effects. This makes it the correct choice.

c. Cash Payments Journal
- This journal records cash outflows for payments, typically to suppliers or for operating expenses. A stock withdrawal by the owner is not a cash payment transaction in itself (unless it involves a cash draw), and even then it would still be more accurately recorded in the General Journal as a transfer between inventory and owner’s equity, not as a cash disbursement alone.

d. Purchases Journal
- The Purchases Journal is used to record purchases of goods or materials on account. It is not suitable for recording withdrawals of stock by the owner for personal use, which does not constitute a purchase transaction and involves the owner’s equity rather than supplier purchases.

Conceptual note: Recording owner withdrawals of stock for personal use typically involves reducing inventory (debit) and recording an owner’s drawing or equity adjustment (credit), with the General Journal providing a flexible place to capture this non-routine, equity-impacting transaction. The other journals are specialized for routine operating activities (sales, cash payments, purchases) and do not capture the equity transfer inherent in a draw.

In summary, option b (General Journal) aligns with the nature of the transaction, as it handles non-routine entries that affect ownership equity and inventory, whereas the other journals are reserved for more specific transactional categories that do not accommodate owner-stock withdrawals in a straightforward way.

MUF0021 Accounting Unit 1 - Semester 1, 2025 Quiz: Journals

Which journal is used to record a transaction where the owner withdraws stock for personal use.

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