Sulah took two textile materials worth N500 from his business for his children's use. This would be treated as

Assessment: WAEC SSCE - Financial Accounting - 2019 (Objective) Subject: Financial Accounting

Question 1 Report

Sulah took two textile materials worth N500 from his business for his children's use. This would be treated as 

Answer Details
This would be treated as "drawings". Drawings refer to the goods or cash that the owner of a business takes out of the business for personal use. In this case, Sulah took two textile materials worth N500 from his business for his children's use. Since this was not a sale or a loan, but rather an extraction of goods for personal use, it would be considered as "drawings" from the business. It is important for business owners to keep track of their drawings as it affects the profitability and financial position of their business.
Read lesson note on Nature And Significance Of Accounting (JAMB)
Read lesson note on Principles Of Double Entry (JAMB)
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