What is the journal entry for paid carriage on the sale of goods?
The journal entry for paid carriage on the sale of goods is as follows:
Debit: Carriage Outward Account Credit: Cash Account
This journal entry records the expense of the carriage paid on the sale of goods. The carriage outward account is a debit account because it represents an expense. The cash account is a credit account because it represents a decrease in cash assets.
For example, if a company sells goods for $1,000 and pays $50 for carriage, the journal entry would be as follows:
Carriage Outward Account Dr. 50
Cash Account Cr. 50
This journal entry records the expense of the carriage paid on the sale of goods and the decrease in cash assets.
It is important to note that the carriage outward account is a different account from the carriage inward account. The carriage inward account is used to record the cost of carriage paid on the purchase of goods.
- What is the carriage outward account?
The carriage outward account records the expenses incurred when shipping goods to customers. - Why is carriage outward recorded as a debit?
Carriage outward is recorded as a debit because it represents an expense, which reduces the business’s profit. - How is carriage inward different from carriage outward?
Carriage inward refers to the cost of receiving goods from suppliers, whereas carriage outward refers to the cost of delivering goods to customers. - Can carriage outward be included in the cost of goods sold?
No, carriage outward is considered a selling expense and not part of the cost of goods sold. - Why is accurate recording of carriage expenses important?
Accurate recording ensures transparency, financial accuracy, and tax compliance, reflecting the true cost of sales.
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