Carriage inwards and carriage outwards are defined by Accounting Coach.

The cost of transporting goods from a supplier to a business is referred to as carriage.

Shipping and handling costs are incurred by a company when they receive goods from suppliers.The overhead cost pool that is allocated to the goods produced in an accounting period is the most appropriate accounting treatment of carriage inwards.If this is a small amount, it could be charged to expenses and not included in the overhead cost pool.It may first appear on the balance sheet as an asset, and then shift to the cost of goods sold in the income statement as goods are sold.

Shipping and handling costs are incurred by a company when they ship goods to a customer.If the company isn't able to bill customers for this cost, they should charge the cost to expense.The income statement should show the cost of carriage outwards in the same reporting period as the sale transaction.The cost of carriage is usually shown in the income statement.