Free goods with sales, direct or indirect expense

Whatever cost is incurred upto the stage of  conversion of raw materials into finished products the same is to be treated as direct expense and to be shown in the trading account.

In case of trader there are hardly few expenses whihc can be charged to trading account such as freight, purchases etc..  So the thing sold alongwith the tea shud be treated as an indirect expense and shud be charged to the P&L account and not Trading account.

Rs. 10 is to be tretead as sales promotional expense and transferred to P/l a/c.

Should be post to P&L