The owner of a business gifted a car to his son in law on the occasion of his daughter's marriage. Which one of the following is the right entry.
(a) Drawings A/c Dr. To Cash A/c.
(b) Drawing A/c Dr. To Car A/c.
Please share the right answer for the above question. It is a CA CPT mock Test question.
If New car then pass entry a)
if old car pass entry b) on wdv amount
Hi Sandip.
The question doesn't specify whether it is a new car or old car. There are two contradicting question given in 2 different CPT mock test papers.
Q1.
The owner of a business gifted a car to his son-in-law on the occasion of his daughter’s marriage. The following entry was passed in this regard.
Car A/c Dr. 5,00,000
To Cash A/c 5,00,000
What is the rectification entry ?
(A) Drawings A/c Dr. 5,00,000
To Cash A/c 5,00,000
(B) Drawings A/c Dr. 5,00,000
To Car A/c 5,00,000
(C) Car A/c Dr. 5,00,000
To Drawings A/c 5,00,000
(D) Cash A/c Dr. 5,00,000
To Car A/c 5,00,000
Q2. The owner of a business gifted a car to his son in law on the occasion of his daughter's marriage. Which one of the following is the right entry.
(a) Drawings A/c Dr. To Cash A/c.
(b) Drawing A/c Dr. To Car A/c.
The correct answer given for Q1 is option b
and answer to Q2 is option b as well.
CAclubindia
