The reason for treating carriage inwards in the trading account is because

Accounts - Principles of Accounts

WAEC 2023

A. it is an expense on goods sold to customer
B. carriage outwards is an expense item in the profit and loss account
C. it is an expense on goods purchased
D. it does not appear in the balance sheet

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Correct Answer: Option C

Explanation

Carriage inwards is the cost of transportation charged on goods purchased. It must be added to the goods purchased. Carriage inwards is the cost incurred in order to bring the goods purchased to the present location hence it is debited to trading account.

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