![]() ![]() The cost of carriage outwards usually appears within the cost of goods sold section in the income statement. Thus, the cost of carriage outwards should appear in the income statement in the same accounting period as the sale transaction to which it relates. The company may be able to bill customers for this cost if not, then the company should charge the cost to expense in the period incurred. ![]() Related AccountingTools CoursesĪccounting for Freight Definition of Carriage OutwardsĬarriage outwards is the shipping and handling costs incurred by a company that is shipping goods to a customer. Thus, depending on the accounting treatment, it may first appear in the balance sheet as an asset, and then shift to the cost of goods sold in the income statement as goods are sold. The most appropriate accounting treatment of carriage inwards is to include it in the overhead cost pool that is allocated to the goods produced in an accounting period. If this is a minor amount, it could just be charged to expense in the period incurred, with no inclusion in the overhead cost pool. Definition of Carriage InwardsĬarriage inwards is the shipping and handling costs incurred by a company that is receiving goods from suppliers. Carriage refers to the cost of transporting goods into a business from a supplier, as well as the cost of transporting goods from a business to its customers. ![]()
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