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GCE Financial Accounting 1990 Question 37

Question 37

Final Accounts of a Sole Trader

Carriage inwards is shown on the

  1. A.debit side of the Profit and Loss Account
  2. B.credit side of the Trading Account
  3. C.debit side of the Trading Account
  4. D.credit side of the Profit and Loss Account
  5. E.debit side of the cash book.
Show the answer and explanation

Answer: C (debit side of the Trading Account)

Explanation

Carriage inwards adds to the cost of goods bought, so it is debited in the trading account.