Create transactions for Free samples
Camander
Member Posts: 6
I am trying to create the transactions that it takes to account for giving away a free sample.. Cost to buy is $100. usual retail is $200. I gave away a free unit. I want to expense $100 against advertising what is the other half of the accounting entry in my WAVE accounts? Recommendations? Best practice?
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Camander,
There is no other half. When a business gives away samples they can only write off the cost of the item. So you would debit Advertising and credit inventory. If you do not have an inventory account on the balance sheet then no entry is needed. This is because the item given away has been accounted for in purchases for resale on your income statement.
Sorry, I wasn't clear. The expense is Advertising/marketing of course.- What WAVE Asset/Liability/Equity account would be charged?
The purchase of that unit must create a credit to an account that is decreased by the advertising expense so it is balanced. How to do in WAVE?
Camander,
It is going to depend on how you account for purchases of items for resale.
How do you handle purchase of products for resale? Do you expense as purchases or do you post all purchases to inventory on the balance sheet?