Question

where does carriage on purchase comes in profit and loss accounts​

Answer 1

Answer:

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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Answer 2

ANSWER :

Carriage on purchase or carriage inward doesnot come in Profit and Loss Account. Instead, it comes in Trading Account.

• Carriage on purchase is written in the debit side of Trading Account.

MORE INFORMATION :

• Trading Account is an account which is prepared for ascertaining the overall result of trading, i.e., buying and selling of goods.

• Direct income and direct expenses are recorded in the Trading Account.

• Gross result of the financial year i.e., gross profit or gross loss is ascertained in the Trading Account.

• Profit and Loss Account is the account prepared after Trading Account to ascertain the net result, i.e., net profit or net loss.

• Net result of the financial year, i.e., net profit or net loss is ascertained in the Profit and Loss Account.

• Indirect income and indirect expenses are recorded in the Profit and Loss Account.

• Both the Trading Account as well as the Profit and Loss Account are the parts of Income statement which is a part of Final Account.

• The Income statement and the Position statement together is called Final Account which include the Trading Account, the Profit and Loss Account and the Balance Sheet.

• Carriage on purchase or carriage inward are the expenses which are paid for bringing the goods to the business entity or to the factory. It is debited to the Trading Account.