If company gives few sample goods to customers as free then what type of expenses is this? How to pass this entry?

For this transaction there will be 3 entries in the books as under:

Advertisement a/c       Dr.

  To Goods Distributed as free samples a/c

Goods Distributed as free samples a/c       Dr.

   To Trading a/c

Profit and Loss a/c              Dr.

   To Advertisement a/c

Goods Distributed as free samples a/c will be created under group Sales

Advertisement a/c will be created under group Indirect expenses.

Both above account will be closed and their balance will be transferred to Trading/P&L a/c

It's sale's Promotion Expense and also our product or stock is decreasing.

Journal Entry Will be:

Advertisement / Sales Promotion Expenses a/c    Dr.

          To Product / Goods a/c   ( Amount will be in Cost Price, not in selling price )

Advertisement and promotion expenses

This can be passed as Sample Orders in Order Management

Accounting will be

Sales & Customer account will not be affected as it is free of cost

Debit COGS account 

Credit will be to Inventory account

Can be automated to reverse from COGS to Advertisement & Promotions expenses account or it can be manually entered

Dr Promotional Expense  (AED xxx)

Cr  Inventory/ Stock            (AED xxx)

Note: AEDxxx is Cost Price

Advertisement or Sales Promotion Expenses       Dr.

Company or Distributors                                                     Cr.

It is Advertisement expenses.

It is indirect sales. It comes to sales promotion, than sales in marketing subject. Samples may be accepted or unaccepted. It is selling expense of the period as sales promotion, or if it is very regular, sample expense, which can give an idea, expense analysis, cost & benefit analysis.

This should be categorized as promotion cost & treated as expense current years portion & deferred the future years portion.

The simplest and straight forward set of entries is:

DR Advertising expense

CR Inventory

It type of the expense in general administration, and in the cost of general administration there is any the name of account marketing and promotion. so we'll expense to that account. for journal example :

                                                                       Dr                                              Cr

Exp.General administration                 xxxxxxx

     COGS                                                                                                     xxxxxx

all free samples are to be accounted as business development expenses.