Question

Goods cost in ₹6000 was given as wages to the workers and goods cost in ₹5000 was distributed as free sample

Answer 1

Answer:

Goods distributed as free samples are products

given away by a business usually for

promotional reasons.

The goods distributed as free samples do not have a sales value and therefore cannot be recorded in the accounting records as sales.

Feedback The free product samples do however have a cost which needs to be removed from the cost of sales account and recorded as an expense. The expense account used will depend on the reason the goods were distributed as free samples and might include for example sales and marketing, promotion, advertising, charity or simply a free samples expense account.

Journal Entry :

Advertisement A/c Dr.

To Purchase A/c

Explanation:

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