Question

Goods costing Rs.10,000 destroyed as free sample should be credited to

• A. Purchase Account
• B. Sales account
• C. Cash Account
• D. Drawing Account

Answer 1

The correct option is A Purchase Account

The journal for goods distributed as free samples is -

Advertisement Expense A/c Dr 10000

To Purchases A/c 10000

Here, purchases account is credited because goods are going out of the business, when goods are brought in the business purchases account is debited, so when goods are going out of the business it is to be credited.