PRC-1 · Chapter 7 · Question 35 of 100
How is 'Carriage Outwards' (freight out) treated in the financial statements?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It is treated as a selling and distribution expense and excluded from inventory cost.
Explanation
Carriage outwards is the cost of delivering goods to customers. It is a selling expense, not a cost incurred in bringing the inventory to its present location and condition.
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