PRC-1 · Chapter 10 · Question 19 of 100
Which of the following describes the correct accounting treatment for 'Carriage Outwards'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) It is treated as a selling/distribution expense in the Statement of Comprehensive Income.
Explanation
Carriage outwards is the transportation cost incurred to deliver goods to customers. It is a selling and distribution expense and does not form part of the cost of inventory or cost of sales.
More Preparation of Financial Statements MCQs
- Q21At the end of the year, a business has prepaid insurance of Rs. 12,000. Where will this appear in the financial statements?
- Q22Which of the following equations correctly defines 'Gross Profit'?
- Q23What is the primary purpose of the 'Statement of Changes in Equity'?
- Q24If an entity fails to record an adjusting entry for accrued wages at year-end, what is the effect on the financial statements?
- Q25Which of the following represents a 'Capital Expenditure'?