Question

Goods worth rs.200 were given as free samples to prospective customers ?

Answer 1

Answer:

Journal entry

Advertisement expenses A/c  Dr 200

         To purchases A/c                         200

(being goods given as free samples )

Reason:

goods given as free samples is in the nature of advertisement therefore its accounted as advertisement expenses .

Goods given as free samples cant be takes as sales therefore purchases have been credited (reversal of purchase)

Hope it helps

Answer 2

Answer:

Advertisement expenses a/c Dr. 200

To purchases a/c. 200

(being given as free samples)

I hope you got it.