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Outward Tansportation Expanses

CA. Rajesh P. Ahir (In Service @ PSU) (687 Points)

15 September 2010

Hi,

Whathar Otward Transportation Expanses, in case of trading firm, is Item of Trading Account Or Profit and Loss Acxcount ?

Answer with REFERENCE to RELEVENT Accounting Standered.

Thanks

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1 Replies

darpan chheda (Accounts Manager) (90 Points)
Replied 15 September 2010

Freight outward is normally incurred in relation to sale of goods & hence treated as selling expenses, The same will be charged off to profit & loss account

As per AS 2 regarding valuation of inventories, any expenses incurred in bringing the inventories to the location of its intended use will be a part of inventory cost & hence will be a part of trading account. Once the goods reached the destination, any expense incurred will be a part of P & L account