Carriage Inward

by Laxmann Nalamadi Istari
(Mumbai)

Carriage by trainQ: Carriage inward comes under which category?

A:
Well, first let's make sure we understand what "carriage" is - carriage simply means transport costs. For example the cost of transporting goods by ship or by train.

So carriage inwards would be transport costs for purchasing an asset.

One key rule when valuing an asset is that the cost of an asset includes all costs necessary to get the asset to your business and into a condition in which it can be sold.

So if you had the following expenditures:
- Purchase price of manufacturing machine $40,000
- Shipping transport costs $500
- Import taxes and duties $2,000
- Transport costs by rail $200
- Installation costs $1,000

Carriage by shipThen the total cost of the manufacturing machine would be $43,700 (all the costs above added together).

So "carriage in" or "freight in" or "transport costs in" (or whatever similar term they use) is a part of the cost of an asset.

The only exception to this that I'm aware of is when you purchase inventory and you use the periodic system of inventory accounting. Then the transport cost is recorded as a separate expense account.

Hope that makes sense!

Good luck in your studies!

Best,

Comments for Carriage Inward

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Defining Carriage Duty
by:

A duty is a tax, especially a tax on imports. So I am pretty sure "carriage duty" is the same as "carriage inward."

Perfect
by: Anonymous

Perfect

Thanks
by: Marshal

Lately, I have been helping my dad put up his accounts in order at the shop. And since he is doing a wholesale business, there are a lot of carriage inwards and since I completely couldn’t understand what it was, I thought of learning about it.

Wow...
by: Satya

Thank U sir... For great Explanation

wow
by: natzi

this is a good one

carriage inward
by: Anonymous

Thank you Sir Ji

Ganupalli Srinivasa Rao
M/s.ABR Organics Ltd
Accounts Officer,
Hyderabad

thankyou
by: Amita lavania

As I'm not account student, it helped me lot, to understand my tally course, thank you

Thanks!
by: faraz

Thanks!

very nice..
by: Anonymous

thank you for giving this useful information..

thank you
by: Anonymous

thank you so much

EXPLANATION
by: bharat

very well explained

doubt
by: Anonymous

so carriage duty means the same?

THANKS
by: muhammad rafaqat

Thanks a lot to give us important information

nicely explained
by:

Nicely explained

.
by: Tausif Mohammad

Helped A lot,
Thank you :)

Shipping inwards
by: Anonymous

Thanks for explanation!

hey
by: Anonymous

thanks for ur help.

Carriage Info
by: ravi

Info given is nice, plz visit the site those who don't know about accounting!

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