What are carriage inward expenses and where are they recorded? Calculate the Cost of Goods Sold given Opening Stock, Purchases, and Closing Stock.

Here are the solutions to the questions.

Question 7:
Carriage inward expenses are direct costs associated with bringing inventory to the business's premises and are included in the cost of goods purchased. These expenses are treated in the Trading Account to determine the cost of goods sold.

• The correct option is C) Trading account.

Question 8:
To calculate the Cost of Goods Sold (COGS), we use the formula:

$$\text{Cost of Goods Sold} = \text{Opening Stock} + \text{Purchases} - \text{Closing Stock}$$

Given values:
Opening Stock = 650,000 CFAF
Purchases = 310,000 CFAF
Closing Stock = 5