Final answer:
The correct journal entry for a sole trader taking goods from stock for personal use would involve debiting the Drawing Account and crediting the Purchases Account with the cost value of the goods, which is Rs.1000 in this case.
Step-by-step explanation:
When a sole trader withdraws goods from stock for personal use, this is known as drawing and needs to be recorded in the accounting books. The correct journal entry to reflect this transaction would involve debiting the Drawing Account, which is a personal account representing withdrawal of goods from the business by the owner. The credit entry would typically reflect the cost of the goods rather than the selling price. Therefore, the correct journal entry would be:
Dr. Drawing Account Rs.1000
Cr. Purchases Account Rs.1000
This records the cost value of the goods taken out of stock, thus reducing the Purchases Account balance, which is where the cost of goods is tracked. Option (b) reflects the correct treatment for this transaction. It is important to note that the Sales Account should not be involved in this transaction as no actual sales is taking place; the owner is merely withdrawing stock for personal use.