Sales Promotions on Chart of Accounts

by Naz

Sales Promotions on Chart of Accounts

Sales Promotions on Chart of Accounts

Hello, Let me first of all thank you for help all over the world..

How to account for sales promotions expense and stock consumption..

Lets say we are supplier of Pepsi.. we have a promotion and we are distributing free Pepsi to 5000 people..

How to record it on the chart of accounts?

Thanks in advance for any help!

Comments for Sales Promotions on Chart of Accounts

Average Rating starstarstarstarstar

Click here to add your own comments

Dec 28, 2017
Sales Promotions on COA
by: Stephanie

Thank you for your question about how to account for sales promotional expenses on the Chart of Accounts.

When pulling products out of an existing inventory to give away as promotional samples, there must be a journal entry to adjust the inventory account on the general ledger.

To do this you would use the actual cost of manufacturing the items, including storage costs and any other expenses used in the company's cost of goods sold calculation.

Then you would Debit sample expenses or prepaid expenses, depending on whether you are expensing or capitalizing your sample costs.

And you would Credit the inventory account for the same amount.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Chart of Accounts Questions.

Please subscribe to my monthly newsletter, Bookkeeping Basics E-zine. It tells you every month about the new information that I have added, including some great tips and advice from myself and other Bookkeeping Basics readers.

Enter Your E-mail Address
Enter Your First Name (optional)

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Bookkeeping Basics E-Zine.