Insurance was Rs. 200
Carriage Inward included Rs. 1,000 paid for transport charges and Octroi on
new machinery purchased on 1-4-2006 whats are its two effects
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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.
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