Purchased goods for personal use

I would record the transaction as withdrawing money from the company for personal use.

So the journal entry will be:
Debit the Owners Capital Account for the amount of money used
Credit the Owners Drawing Account for the amount of money used

I made a mistake in my previous entry.

The correct journal entry should be:
Debit the Owners Drawing Account for the amount of money used to purchase goods for personal use.
Credit Cash for the same amount.

The entry I posted earlier will be the closing entry at the end of an accounting period.

Quote:

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Originally Posted by pready

The correct journal entry should be:
Debit the Owners Drawing Account for the amount of money used to purchase goods for personal use.
Credit Cash for the same amount.

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I have a question. Didn't the Economic Entity assumption/concept state that the business unit is distinct from its owners. So basically, the company keeps its activity separate from the personal transaction/activities. My take on this would be: No Journal Entry

You are correct, however the way I interpreted the problem is that the owner took money out of the company to purchase goods for his or her personal use, which you would need to do a journal entry for the owner of the company withdrawing cash from the business. So you would;
Debit the Owner's Drawing Account
Credit Cash for the amount of money used.