Delivery Expenses to Customers

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tauq786x
tauq786x Registered Posts: 35 Regular contributor ⭐
in AAT Level 3 (Level 6 in Scotland)
I just realised that the Delivery Expenses to Customers is actually a CARRIAGE OUT and should have been used to calculate Cost of Sales. I however put it in the Expenses section of the P&L... AM I GONNA FAIL:crying:???

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  • oldlady
    oldlady Registered Posts: 10 New contributor 🐸
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    Don't think you're the only one! Hopefully not a fail!?
  • Dill
    Dill Registered Posts: 23 New contributor 🐸
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    Doesn't carriage *inwards* only class as cost of sales?

    Very sure it does... ya know just the same as delievery expenses to your premises count towards cost of a fixed asset?

    Outwards is an expense. 100%.
  • thoms04
    thoms04 Registered Posts: 36 Regular contributor ⭐
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    Dill wrote: »
    Doesn't carriage *inwards* only class as cost of sales?

    Very sure it does... ya know just the same as delievery expenses to your premises count towards cost of a fixed asset?

    Outwards is an expense. 100%.

    Bugger! I included it in the Cost of Sales ..... just checked my notes and they class it as a normal expense.
  • jmf
    jmf Registered Posts: 12 New contributor 🐸
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    just checked on my proforma P & L in the back of my osborne book and Carriage outwards is listed as an overhead or expense.

    Carriage inwards is used to calculate cost of sales.

    Phew I was worrying for a while as I had put it as an expense and was wondering after a few comments.

    These forums are a bit dangerous you come on confident you have only made a few errors then slowly doubt yourself more and more.
  • MOHMEDSALIM PATEL
    MOHMEDSALIM PATEL Registered Posts: 184 Dedicated contributor 🦉
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    delivery expenses is not cost sales

    i do not believe but if you saying delivery expenses is cost of sales than it is
  • immense
    immense Registered Posts: 97 Regular contributor ⭐
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    Delivery expenses in (carriage inwards) is a cost of sales, delivery expenses out (carriage outwards) is an expense. mohmedsalim - why did you post this if you don't believe what people are saying!You would not fail if you got one thing wrong - you just have to show you are competant
  • MOHMEDSALIM PATEL
    MOHMEDSALIM PATEL Registered Posts: 184 Dedicated contributor 🦉
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    Question Says

    Question Does Say That We Paid Delivery Expenses On Behalf Of Customers If You See Page 75 It Does Explain The Terms Os Carriage In /out And How To Treat Them.
  • ccreaven
    ccreaven Registered Posts: 119 Dedicated contributor 🦉
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    MOHMEDSALIM PATEL wrote: »
    Question Does Say That We Paid Delivery Expenses On Behalf Of Customers If You See Page 75 It Does Explain The Terms Os Carriage In /out And How To Treat Them.

    so where should it have been? cogs or expense?:confused1:
  • hanapospis
    hanapospis Registered Posts: 111 Dedicated contributor 🦉
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    Hi Everyone,

    I have just started the Advanced level a month ago and have just sat my IAC exam...but what I have been taught...

    If you are paying the delivery cost for your customer it is an expenses and it goes as an expense to the P&L.

    If you paying for the delivery cost for the goods you are buying.. You add it up to the purchases so it goes to the cost of sales in P&L..

    I might be wrong....:001_unsure: so correct me anyone if I am..

    but this is what I have been taught :confused1:
  • numberjunky
    numberjunky Registered Posts: 88 Regular contributor ⭐
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    Well if the AAT meant 'delivery expenses on behalf of customers' to mean 'Carriage In', it sure is a very odd way of saying it. Seems like we have to decipher what's in their heads now as well as remember techniques, definitions and formulae.

    Referring to 'our customers' suggests a SALE which could only be Carriage Out (Expense to P&L)

    I took it as an expense as many others did.

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