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Journal Entry

Biju.V (Accountant) (128 Points)

06 November 2009  

What is the Journal entry for goods sold as samples

 15 Replies

ashish gupta ( student) (1917 Points)
Replied 07 November 2009

1For raw material or in trading concern

Free Samples A/c Dr.

To purchase A/c

2 For finished Goods

Free Samples A/c Dr.

To Sales A/c

shalu (student) (43 Points)
Replied 07 November 2009

ashish , could u explain d journal entry no. 2 plzz

Ashish Ojha (Chartered Accountant) (469 Points)
Replied 07 November 2009

I think entry should be..

1. Free Sample A/c   Dr....

         To Stock/ Purchase A/c

. P & L A/c                  Dr....

         To Free Sample A/c

If any Sample is "free" then How can we credit sales & with what amt???

We can only charge the cost of samples to Profit & Loss A/c, just like any other Expenditure for Advertisement...

triumph-CMA (Chartered Accountant) (503 Points)
Replied 07 November 2009

CA Ravi Sisodia (CA,CS,CMA) (32221 Points)
Replied 07 November 2009


                  free samples A/c   Dr.       (at cost of samples)

                                  To Trading A/c / stock / purchase        (at cost of samples)


Abhay (1) (123 Points)
Replied 11 November 2009

i agree with ashish ojha

Jag Bhushan Sharma (Faculty in a B-School) (623 Points)
Replied 18 November 2009


In case a company is carrying on manufacturing, then it will bebetter if it maintains Manufacturing A/c as well as Trading A/c.  In case raw material is distributed as sample, then entry should be Free Sample A/c  Dr. to Manufacturing A/c/Purchases with cost of purchases amount.

But if finished goods are distributed as samples, then entry should be Sample A/c Dr. To Trading A/c at Cost of Sales.

Manpreet (Student) (22 Points)
Replied 08 January 2010

how to crack journal entiries

Jag Bhushan Sharma (Faculty in a B-School) (623 Points)
Replied 11 January 2010

It is quite simple.  All the accounts can be divided in four categories i.e Assets, Liabilities, Expenses and Incomes. 

Rule I: In case of Assets Debit when they increase and Credit when they decrease. 

Rule 2:  Credit when Liabilities increase and debit when liabilities decrease.  Treat Capital A/c as a liability.

Rule 3: Debit all Expenses and Credit all Incomes and Revenue.

AHAMED. B (3 'C' - Final) (273 Points)
Replied 22 January 2010

A/cing entry for free samples:

Free samples A/c Dr.

To Purchases A/c..

Here, it is assumed that samples are given out of purchased goods...


saranraj (CA FINAL) (417 Points)
Replied 22 January 2010

Entry is

Sales promotion expenses a/c  Dr.              xxxxxx

            To Purchases a/c Cr.                                           xxxxxxx

samip karpe (accounts assistance) (152 Points)
Replied 27 January 2010

 Yes, Ashish  Ojha is correct

V P Narasimhan (Accounts Manager) (784 Points)
Replied 03 March 2010

In some Companies Free Samples has been treated as "Sales Promotion" a/c


Advertisement A/c       Dr

              To Purchase A/c / Trading A/c / Opening Stock A/c


Profit & Loss A/c          Dr

              To Advertisement A/c

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