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Question

Carriage outward is charged to _______________.


A
Debit side Profit & Loss a/c
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B
Debit side Trading a/c
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C
Credit side of Profit & Loss a/c
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D
Credit side of Trading a/c
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Solution

The correct option is A Debit side Profit & Loss a/c
Carriage is a term used for cost of transportation of goods from either side. This may be of two types, carriage inward which is paid at the time of purchasing the goods and carriage outwards which is paid while doing the sales.

Carriage outward is an expenses of seller when the goods is sold on FOB basis. Its an indirect cost and to be debited to profit & loss account.

Accountancy

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