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

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Question ajoutée par Syed Sadiq Ali syed , Financial Accountant , AL AALI AL RAQI EST
Date de publication: 2016/09/15
Anil Lalwani
par Anil Lalwani , Chief Accountant , Al Ahli Hospital

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

 

 

 

 

 

 

Abdul Azeez P
par Abdul Azeez P , General Accountant , Robtstone (ME) LLC

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 )

Balaji Ramamurthy
par Balaji Ramamurthy , Senior Programs Manager - Technology Solutions , Confidential

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

Muhammad Saeed
par Muhammad Saeed , Accountant , CitroPak Limited

Advertisement or Sales Promotion Expenses       Dr.

Company or Distributors                                                     Cr.

Rohan Bajgai
par Rohan Bajgai , Accountant , Little Flowers' English School

It is Advertisement expenses.

Rashid Pervez
par Rashid Pervez , Financial Consultant , Dewan Motors Pvt Limited

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.

Nazmul Islam CMA
par Nazmul Islam CMA , Manager , Robi Axiatal Ltd.

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

Ryan Adra
par Ryan Adra , Budget and reporting manager , Irrawaddy Green Towers

The simplest and straight forward set of entries is:

DR Advertising expense

CR Inventory

akhyar akhyar
par akhyar akhyar , general accounting , pt.agri wangi indonesia

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

 

gopalakrishnan m s
par gopalakrishnan m s , Head - Finance and accounts , Avasarala Technologies Ltd

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

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