Journal Entry of Carriage Inwards
Journal entry for transportation inward is dependent upon the object and purpose of use. The phrase “inwards” indicates that the cost is incurred during the process of bringing the items into the firm, regardless of whether the product is meant for resale.
1. Journal Entry while Purchasing Inventory: The intention is to employ the goods for operations; hence, in this instance, transportation inwards is considered a direct operating expenditure. On the trading account’s debit side, the amount is listed. So, the journal entry for carriage inwards at the time of purchasing inventory can be written as,
2. Journal Entry while Purchasing a Fixed Asset: When carriage is incurred during the purchase of fixed assets for an individual’s use, it gets counted as a capital expenditure. Carriage inward is not journalized individually in this instance; instead, it shall be included in the asset’s cost. The sum paid for carriage inwards will be included in the amount deducted and credited. So, the journal entry while purchasing fixed assets can be written as,
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