Question

Entry Ni final account - * Carriage inwards included RS.1000 paid for transport and octroi on New machinery purchased on 1-4-2006.

Answer 1

Answer:

Carriage outward is the seller's cost of delivering goods to the buyer. It is related to sale and carriage inward is the transportation cost associated with purchase of goods. Trading account includes all the expenses related to production. All the indirect expenses comes in profit and loss account. That's why carriage outward appears in profit and loss account and carriage inward appears in trading account.