Q.Journalise the following in the Journal Proper of Kavya Traders: Goods costing ₹3,000 were given away as charity to a local school.

Goods given away as charity leave the business without any sale taking place, so Purchases Account is credited at cost and a Charity (or Donation) Account is debited.

Goods given away as charity are trading goods leaving the business for a purpose other than sale — no invoice is raised, no customer account is affected, and Kavya Traders receives nothing in return. The cost of the goods given away (₹3,000, never the goods' normal selling price) is treated as a charitable expense.

Journal entry: Charity A/c Dr ₹3,000; To Purchases A/c ₹3,000. …

As with drawings and free samples, the value must be taken at COST, never at the selling price the goods would otherwise have fetched — and the credit must go to Purchase …