Difference Between Carriage Inwards and Carriage Outwards
Basis |
Carriage Inwards |
Carriage Outwards |
---|---|---|
Definition |
Refers to freight and transportation costs incurred when receiving goods from the supplier to the buyer’s warehouse | Refers to freight and transportation costs incurred when delivering goods from the seller’s warehouse to the customer |
Responsibility |
The buyer is primarily responsible for the payment | The seller or supplier is primarily responsible for payment |
Treatment |
Treated as a direct expense | Treated as an indirect expense |
Capitalization |
May or may not be capitalized, depending on the asset bought | Not capitalized |
Reflection in a Statement |
Entries posted in the trading account | Entries posted in the income statement or profit and loss account |
Debit/Credit Side |
Entries on the debit side of the trading account | Entries on the credit side of the income statement or profit and loss account |
Journal Entry |
Varied based on the element and purpose of use | Varied based on the element and purpose of use |
Also Known as |
Transportation-Inwards, Transportation-In, Freight-In, Freight-Inwards | Transportation-Outwards, Freight-Outwards |
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