Free Samples

[Steven Davids]

Hi Thanks,

It is free samples I am giving away to customers.

Thanks for the advice.

On 2 November 2014 11:49, Wm <wm+gnc at tarrcity.demon.co.uk> wrote:

> Sat, 1 Nov 2014 06:46:27 <5454C813.5090809 at austin.rr.com>  Jay Ridgley <
> jridgley2 at austin.rr.com>
>
>  On 11/01/2014 05:03 AM, Steven Davids wrote:
>>
>>> Can anyone please assist?  How do I handle a free sample I give to
>>> customers of my small business?
>>>
>>
> are they free to you
>
> OR
>
> free to your customers and cost you something ?
>
>  I am not an accountant, however, I would treat the cost of the item you
>> are providing as a marketing expense. Take the money from cash(asset) and
>> credit a marketing expense account.
>>
>
> That'll work if the samples are made at or around the time they are given
> away and have no intrinsic value.
>
> however if 100 samples are made which cost Steven something and are given
> away over a period of time it is more like
>
> reduce   cash (or similar liquid asset)
> increase stock:samples (or similar not so liquid asset)
>
> then as he gives each sample away it is recorded as an expense against
> stock:samples
>
> but this is, as Jay suggests, an accounting question rather than a s/w q
> and I'm not seeing anything GnuCash can't easily do
>
> other fun bits to consider are the valuation of the samples as an asset
>
> should they be valued at cost ?
> should time Steven spent making them be included in their value ?
> should Steven apportion the fact that he is renting a garage to store his
> samples be a cost of the samples or not ?
> etc.
>
> and at the end of all that I've no idea if the tax man will view it all
> differently where you (the person reading this) lives
>
> --
> Wm...
>
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