Journal Entry

 If you give goods as sample it is business promotion expenditure.

Journal entry. 

Business promotion A/c Dr   xxxx

To Sales A/c                                         xxxx

(Being goods given as samples.)

This will inturn increase expenses and increase income.  Actually there is no need for entry.  But we need it for the purpose of internal control and Showing Proper GP Ratio. Who ever maintains inventory also in books then they have to pass this entry.

 Dear Sathya

Goods distributed as sample, goods lost, goods taken for personal use and distributed for charity are always recorded at cost. So it is better to credit Trading a/c or purchases account instead of Sales account. Entry is made at cost.

 This is so becouse these transactions are not made with any intention to earn profit.

Thanks Mr Dhirendra singh for your valuable reply

Agree with dhirendra. should be entered at cost

yes..naturally.

Goods given as samples A/c   Dr.

                          To Trading A/c

 Agree with CA Dhirendra Singh. Thanks for correction..

ntry will be

goods distributed as free sample   Dr.

     To purchase a/c

P&L a/c dr.

   to Gods as free sample a/c

Goods Distributed as Free Samples A/c Dr.     -----

      To Purchase A/c                                                                -------

&

P & L A/c     Dr.                                                         -------

        To Goods Distributed as Free Samples                  -------

Sample A/c       dr.

Goods Purchase a/c cr

Sample A/c       dr.

Goods Purchase a/c cr

This should be the correct entry

it is better to credit the purchase a/c instead of crediting the trading a/c.

Agree with Abhay and Himanshu....