accounting for free samples

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seema singla (Querist)
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17 May 2010 A Co. manufactures medicines. It sends
some medicines as free samples and sent them to dealers and doctors. I want to know what entries will be passed for these samples in the books and co. and dealers.
Please reply.
Thanx

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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17 May 2010 advertisement Account A/c ___________Dr.
___To Trading A/c

seema singla

seema singla (Querist)
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17 May 2010 Please tell me in detail in the books of both parties

Prashant

Prashant (Expert)
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19 May 2010 you have to pass following entries

I) Free Sample Distibuted Direct by Co.

Prepare Sales bill without tax
FOC (Debtors) A/c
to Sales A/c

& trans balance perodically of FOC (Debtors) A/c to Free Sample A/c (expenses)

II) Free Sample distibued thru Deler
issue CN to Deler
FOC (Debtors) A/c
to Dear A/c