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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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Most Upvoted Answer
Goods are distributed as free samples worth Rs. 50,000 for advertiseme...
Journal Entry for Distribution of Free Samples for Advertisement
The distribution of free samples for advertisement purposes is a common practice among businesses. It is a way of promoting a product or service by allowing potential customers to try it out for free. When a business distributes free samples, it incurs an expense, and this should be recorded in the books of accounts. The journal entry for the distribution of free samples for advertisement purposes is as follows:
Advertisement A/c Dr. 50,000
To Purchases A/c 50,000
Explanation:
The above journal entry is based on the following principles:
1. Advertisement A/c Dr.: When a business distributes free samples for advertisement purposes, it incurs an expense in the form of the cost of the product or service given away. This expense is recorded in the Advertisement A/c, which is a nominal account. The account is debited to show the increase in expenses.
2. Purchases A/c: The Purchases A/c is a real account that records the cost of goods purchased by a business for resale or distribution. When a business distributes free samples, it is treated as a purchase, and the cost of the samples is debited to the Purchases A/c.
3. To: The word "To" is used to separate the two accounts involved in the transaction. It indicates that the Advertisement A/c is being debited, and the Purchases A/c is being credited.
4. Amount: The amount of the transaction is Rs. 50,000, which is the cost of the free samples distributed for advertisement purposes.
Conclusion:
The above journal entry records the distribution of free samples for advertisement purposes. It ensures that the cost of the samples is properly recorded in the books of accounts. The entry also helps to track the expenses related to advertising and promotions, which are essential for the growth and success of a business.
The distribution of free samples for advertisement purposes is a common practice among businesses. It is a way of promoting a product or service by allowing potential customers to try it out for free. When a business distributes free samples, it incurs an expense, and this should be recorded in the books of accounts. The journal entry for the distribution of free samples for advertisement purposes is as follows:
Advertisement A/c Dr. 50,000
To Purchases A/c 50,000
Explanation:
The above journal entry is based on the following principles:
1. Advertisement A/c Dr.: When a business distributes free samples for advertisement purposes, it incurs an expense in the form of the cost of the product or service given away. This expense is recorded in the Advertisement A/c, which is a nominal account. The account is debited to show the increase in expenses.
2. Purchases A/c: The Purchases A/c is a real account that records the cost of goods purchased by a business for resale or distribution. When a business distributes free samples, it is treated as a purchase, and the cost of the samples is debited to the Purchases A/c.
3. To: The word "To" is used to separate the two accounts involved in the transaction. It indicates that the Advertisement A/c is being debited, and the Purchases A/c is being credited.
4. Amount: The amount of the transaction is Rs. 50,000, which is the cost of the free samples distributed for advertisement purposes.
Conclusion:
The above journal entry records the distribution of free samples for advertisement purposes. It ensures that the cost of the samples is properly recorded in the books of accounts. The entry also helps to track the expenses related to advertising and promotions, which are essential for the growth and success of a business.
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Community Answer
Goods are distributed as free samples worth Rs. 50,000 for advertiseme...
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
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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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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. 50,000To Purchases A/c 50,000b)Purchases A/c Dr. 50,000To Advertisement A/c 50,000c)Advertisement A/c Dr. 50,000To Sales A/c 50,000d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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