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• # 71002
• Mon 16 May 2011 12:04 PM

Hi

I have been going through some examples of Trading & P & R Accounts and i cannot quite see the logic of carriage and how it should be shown.

If the carriage relates to goods purchased then the cost is added to purchases on the trading a/c, if it relates to sales it is shown as an expense on the P & R a/c.

Why does the carriage relating to sales not appear on the trading account?

Regards

Martin

• "Helping small acorns become large oaks"
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• # 71005
• Mon 16 May 2011 12:42 PM

If the carriage is for goods purchased for resale the cost is part of the cost of sales.

If the carriage refers to sales made then it is and expense of business, same as discount allowed is an expense of business.  It is an amount the company pays in order to get the customers...

Does that help? 

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