hi all,
i have one query about the treatment of stock which we are given as scheme to our customers and shows the value of free goods on invoice . so is there any entry required for that in books.
thks
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ACCOUNTING TRAETMENT OF FREE GOODS
Replies (11)
yes
you have to pass entry for reduction in stock, sales promotion expenses i.e. cost of goods
kindly send me the entry
harish123sharma @ yahoo.com
Sales Promotion - Free Samples Dr.
Stock in Hand Cr.
Show seprate line item for Sales Promotion - Free Samples in your trading account
Further this will be subject to Fringe Benefit Tax
Free Samples A/c Dr.
To Sales A/c
or
Free Samples A/c Dr.
To Branch Stock A/c
(THIS ENTRY IS ONLY IN THE CASE OF BRANCH ACCOUNTS)
To Sales A/c
or
Free Samples A/c Dr.
To Branch Stock A/c
(THIS ENTRY IS ONLY IN THE CASE OF BRANCH ACCOUNTS)
It can be Sales promotion Dr.
To Sales A/c
or
Sales promotion Dr
To Stock A/c
that entry will be only reflected in stock register and will be refllected in quantitative informations given in as per schedule vi in Balance sheet. That total quantity of goods sold plus goods given free of cost. so that figures could be reconcialed with stock register.
yes for accounting purpose and accouting stock take re. 1 value
I think, there is should be no financial entry in the books of accounts. Free sample given is to be treated like to quantity discount. It should be reflected in quantitative statement of tax audit report and in schedule VI informations.
Hi,
The entry has to be
Sales Promotion / Gift A/c Debit
To Purchases Credit
Accounting treatement by Mr. Joseph Alexander, will infleate Sales figure. But actually there is no sales involvement.
Thanks, V. Sakthivelan
Not only this matter, but also every matter and transaction unless it have no value, the entries must be pass. For the correct closing stock this entry must be needed.
entry is
Sales Promotion expense A/c
To Sales A.c
IT IS WRONG ENTRY.BEACUSE IT AFFECT SALES BUT ACULLY THERE IS NO SALES
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