Multiple Choice Questions on Goods Cost price ndash Rs 2000 sales price Rs 3500 distributed as free samples among prospectiv........... for UPSC EPFO Exam Preparation

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Multiple Choice Questions

Goods Cost price ndash Rs 2000 sales price Rs 3500 distributed as free samples among prospectiv...........

General Accounting Principles Accounting cycles
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Goods ( Cost price  –Rs 2000, sales price- Rs 3500) distributed as free samples among prospective customers were not recorded in the books of account

free samples a/c dr 2000
         To goods                           2000

Incorrect Answer

Advertising exp.a/c dr  2000
         To purchases                    2000

Correct Answer

Advertising exp.a/c dr  3500
         To purchases                    3500

Incorrect Answer

None of the above

Incorrect Answer
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Explanation:
Goods ( Cost –Rs 2000, sales price- Rs 3500) distributed as free samples is for advertisement purpose it is an expense to the business so advertisement a/c will be  debited and purchse a/c will be credited with cost price
Advertising exp.a/c dr  2000
         To purchases                    2000

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Richa Goyal

Isme not pucha tha so answer is depicted wrong here

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