Income Statement And Balance Sheet Carriages Inwards and Outwards - 550 Words

Income Statement And Balance Sheet: Carriages Inwards and Outwards (Essay Sample) Content: INCOME STATEMENT AND BALANCE SHEETName:Institutional Affiliation:An Income Statement is one of a companys crucial financial statement that help shows their profit and losses over a certain period. The profit or loss is attained by taking all revenues and subtracting all expenses from both operating and non-operating activities.An income statement is a statement used in both corporate finance and accounting. The statement displays the companys revenue, costs, gross profit, selling and administrative expenses, other expenses and income, taxes paid, and net profit, in a coherent and logical manner.Carriages Inwards and OutwardsThe cost to deliver goods from the firm to the customer is known as Carriage Outwards (Sales Carriages). The cost to transport goods (stock) into a firm is called Carriage Inwards (Purchases Carriages).If a supplier charges you for the delivery of the goods on top of the cost of the purchases, then accountants add this to the value of sales. There fore the cost of carrying inwards is usually recorded in Trading Accounts.If one pays to deliver the goods to a customer, then this cost will be charged as an expense on the income statement of the firm. In similar cases, they are made as debit entries because they reduce the number of sales located on the sidecredit of the trading and profit loss account.Marketing, Advertising, and Promotion ExpensesMajority of businesses have many expenses some of which are related to selling goods and/or services. In this scenario marketing, advertising, and promotion expenses we will group them together as they are similar expenses, all related to selling.General and administrative expensesThese Expenses include the selling, general, and the administrative section that contains all other indirect costs associated with running the business. This includes salaries and wages, rent and office expenses, insurance, travel expenses, and sometimes depreciation and amortization, along with other operat ional expenses.Profit and Loss Acc for the year ended 2015/2016 Sales 765,000 Commissions received -3048014795400 8,000 773,000 Less: Cost of Goods Sold Opening Stock 63,000 Add Purchases or Inventory 545,000 Add Carriage Inwards -30480163830001,000 Less Closing Stock -3048013081000(0) -4000514033500(609,000) Gross Profit 164,000 Less Expenses Wages and salaries 43,000 General expenses 8,000 Marketing costsMaintenances 5,0002,000 Carriage Outwards 5,000 (63,000) Net Profit 7620247649007620190499007620-100101,000 Calculating of Gross Profit- Gross profit is calculated by subtracting Cost of Goods Sold (or Cost of Sales) from Sales Revenue.Balance sheet(it i...