Carriage Inward Journal Entry – Accounts
Meaning of Carriage Inwards
Where goods, or any other item is purchased by the company, it we have to increase certain freight charges, to bring the goods from the warehouse of the seller, to the place of the purchaser. The freight or other carriage amount paid by the purchaser is known as carriage inwards. The use of the word in words suggest, that the goods are coming to the purchaser.
Question 1:
What would be the Journal Entry for Carriage Inwards paid amounting to Rs. 100 in Cash for purchase of goods ?
Explanation:
Since Cartage is an expense, so, Carriage Inwards A/c would be debited, because according to the Rules of Debit and Credit, an expense A/c is debited .
Further , on Payment of Carriage Inwards in Cash , Cash, whcih is an Asset is reduced , so Cash A/c is credited, because according to the Rules of Debit and Credit, a reduction in an Asset account is credited.
Hence the Entry would be :
Carriage Inwards A/c Dr. 100
To Cash A/c 100
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