Multiple choice

To which of the following accounts is the carriage inwards debited?

  1. Trading account

  2. Profit and loss account

  3. Profit and loss appropriation account

  4. Balance sheet
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A Correct answer
Explanation

Carriage inwards (transportation cost of bringing goods to the business) is part of the cost of goods purchased. It's shown on the debit side of the Trading account as a direct expense related to purchases. This is different from carriage outwards which goes to Profit and Loss account as a selling expense.

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