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Question
Freight and cartage expenses paid on purchase of goods ___________________.
Freight and cartage expenses paid on purchase of goods ___________________.
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Solution
The correct option is D All of above
Freight and cartage expense are the expenses that are incurred by the purchaser of goods when the goods are purchased. These are usually incurred on the transportation of the goods from suppliers place of business to purchaser's place of business. Direct expenses are included in the trading account, taken into account while calculating cost of goods sold, and can also be added in the amount of purchases. The effect will be the same in all the 3 cases. Hence, D is the correct option.
Freight and cartage expense are the expenses that are incurred by the purchaser of goods when the goods are purchased. These are usually incurred on the transportation of the goods from suppliers place of business to purchaser's place of business.
Direct expenses are included in the trading account, taken into account while calculating cost of goods sold, and can also be added in the amount of purchases. The effect will be the same in all the 3 cases.
Hence, D is the correct option.
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