Carriage inwards
Carriage inwards is the cost of transporting purchased goods to the business. When it is incurred to bring inventory to its present location and condition, it forms part of inventory purchase cost. For a trading business, this means it affects cost of sales and the cost of unsold inventory. Transport for acquiring equipment instead follows the equipment cost rules.
Worked example
Goods cost $2,000 and delivery to the warehouse costs $100. Their inventory cost is $2,100 before any net realisable value adjustment.
Common mistake
Do not confuse delivery on purchases with delivery to customers: carriage outwards is normally a selling expense.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Supporting | July 2027–August 2028 |
| ACCA | F2 | Supporting | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| FIA | FFA | Direct | September 2026–June 2027 |