Question

gave away in charity 101 and goods worth 200

Answer 1

 



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What is the Journal Entry for Goods Given as Charity or Free Samples?

Journal Entry for Goods Given as Charity or Distributed as Free Samples

Charity generally refers to the voluntary giving of help, typically in the form of money or goods to those in need. Goods given as free samples are however a way of advertising. Both acts when performed by a company are required to be recorded in the books of accounts.

Goods given to charity or goods distributed as free samples are not to be accounted as sales. Instead, they are accounted as expenses, simply because, in this case, the outflow of goods happenwithout any consideration.

 

Journal Entry for Goods Given as Charity

When accounting for goods given as charity, the purchases are reduced with the exact cost of goods contributed.