Question

Carriage inward appearing in the Trial Balance is shown on the:

• A. Debit side of the Profit & Loss Account
• B. Debit side of Trading Account
• C. Liabilities side of the Balance Sheet
• D. None of these

Hint:

Remember: Direct expenses like carriage inward are shown on the Debit side of the Trading Account, while indirect expenses go to the Profit & Loss Account.

Answer 1

The Correct Option is B

Step 1: Understanding Carriage Inward.
Carriage inward refers to the transportation cost incurred to bring goods to the business premises. This is a direct expense related to purchasing goods.
Step 2: Position in Financial Statements.
Since carriage inward is a direct expense, it is shown on the debit side of the Trading Account, along with purchases, wages, and other direct costs.
Step 3: Analyzing the Options.
(A) Debit side of the Profit & Loss Account: Incorrect, since it is not an indirect expense.
(B) Debit side of Trading Account: Correct, because it is a direct expense incurred for bringing goods.
(C) Liabilities side of the Balance Sheet: Incorrect, carriage inward is not a liability.
(D) None of these: Incorrect, since option (B) is correct.
Step 4: Conclusion.
Thus, the correct answer is (B) Debit side of Trading Account.