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Hello Mr. Moffat, would you please help to clarify?
Normally the cost of sales figure include the amount for carriage inwards, since it is added to purchases as a cost of purchase.
Why should we deduct this amount again to arrive at the gross profit?
Source:
ACCA
https://educationhub.accaglobal.com
F3 Practice test 3Question: Calculate gross profit
Answer by ACCA: 13,800 – 10,350 – 200 = 3,250
$’000
Revenue 13,800Cost of sales 10,350
Carriage inwards 200
I am not able to access the education hub and so I am not able to read the entire question or the answer (and I am surprised that you are asking me and not the ACCA 🙂 )
The carriage inwards is certainly treated as an extra cost of the purchases (and therefore the cost of sales).
It really depends on the exact wording of the question as to whether the cost given already includes the carriage inwards or not.
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