Carriage outwards appearing in the Trial Balance are shown:

On the debit side of Profit & Loss Account

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On the debit side of Trading Account

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On the liabilities side of the Balance Sheet.

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None of these

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Solution

The correct option is A On the debit side of Profit & Loss Account
Carriage outwards is the expense incurred on the carriage of goods sold out, since it is not related to manufacturing, it is not included in the trading account. It is the overhead expense and is debited to the profit and loss account.

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Similar questions

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. Which of the following account balance will be shown on debit side of Trial Balance?

Q. Which of the following item(s) appearing in the trial balance, should be debited to trading account ?

Q. If a loan from a partner appears on the liabilities side of the Balance Sheet of the firm and the Capital Account of such partner shows a debit balance, how is loan dealt with?

A Statement of Affairs is similar to the :

(a) Balance sheet
(b) Trial balance
(c) Trading Account
(d) Profit & Loss Account

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