CIMA BA3 · Chapter 3 · Question 10 of 10
How are carriage inwards and carriage outwards treated in the statement of profit or loss?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Carriage inwards is included in cost of sales; carriage outwards is a distribution expense
Explanation
Carriage inwards is the cost of bringing purchased goods into the business, so it forms part of cost of sales. Carriage outwards is the cost of delivering goods to customers, so it is a selling and distribution expense.
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