When you give customers stock items as promotional samples, you still need to account for each item. In this article, we'll outline the steps to write off stock items used for promotional samples. That also includes allowing for the adjustment to stock and moving the Cost of Goods to a Promotional Expense account.
Here's how to create an expense account to track:
Select the Gear icon on the Toolbar.
Under Your Company, select Chart of Accounts.
For Account type, select Expenses.
Select Save and close.
Here's how to create an invoice for the item:
Select the Plus icon (+) on the Toolbar, then Invoice.
Here's how to run a Profit and Loss report in Cash Basis for the date of the Invoice to see what amount of Income and Cost of Goods are needed for the Journal Entry amounts:
From the left menu, select Reports.
Select Run report.
This removes the Income, credits the Customer in Accounts Receivable, and credits Cost of Goods to record the Expense.
Select the Plus icon (+) on the Toolbar, then select Journal Entry under Other.
On the first Line:
Under Account, select the Sales of Product Income.
On the second Line:
Under Account, select Cost of Goods Sold (or Cost of Sales).
On the third Line:
Under Account, select Accounts Receivable.
On the fourth Line:
Here's how to apply the credit note/credit note:
Select the Plus icon (+) on the Toolbar.
Under Customers, choose Receive Payment.
The end result should look like this sample:
Now you're able to write off stock items given to customers as promotional samples