It is given in adjustment that during the accounting year, the trader distributed goods worth Rs. 5,000 as free samples. While preparing Final Accounts, this will be shown in

The correct answer is A. Profit and Loss Account.

Free samples are a form of advertising expense, which is a revenue expenditure. Revenue expenditure is an expense that is incurred in the current period in order to generate revenue in the current period. It is not an asset, and it is not carried forward to future periods.

The cost of free samples is therefore deducted from the revenue of the period in which they are given away. This is done in the Profit and Loss Account, which is a statement of revenue and expenses for a specific period of time.

The other options are incorrect because:

• Option B is incorrect because free samples are not an asset, and they are not carried forward to future periods.
• Option C is incorrect because free samples are not part of the cost of goods sold.
• Option D is incorrect because free samples are not a liability.