Goods are distributed as free samples worth Rs. 50,000 for advertisement purpose. Which of the following journal entry would be passed: 
  • a)
    Advertisement A/c Dr. 50,000 
    To Purchases A/c 50,000
  • b)
    Purchases A/c Dr. 50,000 
    To Advertisement A/c 50,000
  • c)
    Advertisement A/c Dr. 50,000 
    To Sales A/c 50,000
  • d)
    None of the above 
Correct answer is option 'A'. Can you explain this answer?

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Answers

Prashant Sharma
Jul 06, 2018
It's answer A because goods are distributed for advertising by the firm and every good when taken out , purchase a/c is debited except for the sale Condition so entry is Adv Suspense a/c Dr To Purchase a/c

It's answer A because goods are distributed for advertising by the firm and every good when taken out , purchase a/c is debited except for the sale Condition so entry is Adv Suspense a/c Dr To Purchase a/c
It's answer A because goods are distributed for advertising by the firm and every good when taken out , purchase a/c is debited except for the sale Condition so entry is Adv Suspense a/c Dr To Purchase a/c