S1: Goods distributed as free samples are debited to the Advertising Account. S2: Goods distributed as charity are debited to the Charities Account. Which statement(s) is/are correct? MCQ with Answer and Explanation

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S1: Goods distributed as free samples are debited to the Advertising Account. S2: Goods distributed as charity are debited to the Charities Account. Which statement(s) is/are correct?

A. Both S1 and S2

B. S2 only

C. S1 only

D. Neither S1 nor S2

Answer: Option A

Solution (By JKExamLibrary)

Free samples are treated as a promotional expense (Advertising). Free charity goods are treated as a charitable donation. Both require debiting their respective nominal accounts.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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