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
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. S1 only
B. Neither S1 nor S2
C. Both S1 and S2
D. S2 only
Answer: Option C
Solution (By JKSSB Mock Tests)
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.
Explanation:
A continuous audit involves the auditor visiting the client regularly throughout the financial year, ideal for large organizations with voluminous transactions.
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