Journal Entry for Goods Given as Charity
A business organization may give some goods as charity to a charitable institution or directly to people in need of charity.
Goods given away as charity reduce the merchandise without any consideration. They are recorded as an expense in the books of the business.
On 20 April 2016, the Metro Trading Company gives away merchandise amounting to $350 to a charitable institution.
Required: How would the company record this transaction in its general journal?
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.