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Freight charges is direct or indirect exp

Others 32521 views 9 replies
Dear Sir, Freight Charges is Direct Or Indirect Exp For Automobile Showroom We Received Freight Invoice Against Purchased Tractors Please Guide its Urgent Thanks
Replies (9)
Quick Summary
Freight charges on purchases (inward freight) are treated as direct expenses and added to cost of goods. Freight on sales (outward freight) is treated as indirect expense. Classification depends on purpose of freight.

Its a Direct Expense since it relates to the business of Automobiles, thereby will be Reflected in the Trading A/c.

Freight on purchase is direct expense and freight on sales is indirect.

When an item is being purchased then it is a direct expense while on the time selling, the freight is indirect expense. I hope this helps.
Freight inwards i.e; freight charges on purchases is a direct expense and frieght outwards i.e; freight paid on sales is an indirect expense as it is a recoverable expense and we collect the same from the customer.

Freight charges are freight rate paid to is the amount paid to a carrier company for the transportation of goods from the point of origin to an agreed location.

The Freight charges are direct charges but Freight on purchase is direct expense and freight on sales is indirect

Freight / Transportation charges incurred towards material movement for Demo, Job Work, Exhibition comes under which head direct or indirect ?

@ Elbin all inward freight charges are absorbed into inventory 

Originally posted by : Yasaswi Gomes new
@ Elbin all inward freight charges are absorbed into inventory 

Under which head direct or indirect?

Direct material cost. Sorry for the delay


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