Sample and FOC

This query is : Resolved

Manoj Kumar (Querist)
Follow

29 April 2008 Hi,
If some company has given some material as sample and some as FOC with main item sold, then how to give accounting effect.Whether any compliance under Income tax , or VAT need? Plz give reference if available in any accounting standard, Guidance Note or any other pronouncement.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
Follow

30 April 2008 One way is to not give any accounting effect for this as ultimately this will automatically reflect in inventory valuation (inventory will be reduced and valued accordingly.

But if you want to give effect, it may be like this:
In case of manufacturing concern, credit the Trading a/c by value of goods (a/c name may be "Samples distributed") and debit P&L with same amount and may be with same name.
In case of trading concern, instead of crediting Trading a/c , Purchases a/c may be credited. Rest treatment is same.
You see, there is no net impact on profits by these entries, that impact will come from inventory valuation.
I think there is no such formal guidance on this subject by any body in India (quite possible I am wrong).

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

office docs

Jagadeesh GR

Suman Lata Saraswat

suresh kotte

Thanwar Chhatwani

Subscribe Now

Sample and FOC

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

GST CONSULTANT

CA Final

Manager- Finance and Compliance

GST CONSULTANCY

Accountant