PRC-1 · Chapter 7 · Question 84 of 100
How is 'Carriage Inwards' (freight-in) properly treated in the financial statements?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It is added to the cost of purchases in determining the cost of inventory.
Explanation
Carriage inwards represents transport costs necessary to bring the inventory to its present location. Under IAS 2, this is a direct cost of purchase and must be capitalized into the inventory value.
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