Chapter 3
Statements of Profit or Loss and Statements of Financial Position：Further Considerations

■ Learning Objectives

·Explain the terms returns inwards， returns outwards， carriage inwards and carriage outwards．

·Record returns inwards and returns outwards in the statement of profit or loss．

·Explain the difference between the treatment of carriage inwards and carriage outwards in the statement of profit or loss．

·Explain why carriage inwards is treated as part of the cost of purchasing goods．

·Explain why carriage outwards is not treated as part of the cost of purchasing goods．·Prepare an inventory account showing the entries for opening and closing inventory．·Prepare a statement of profit or loss and a statement of financial position containing the appropriate adjustments for returns， carriage and other items that affect the calculation of the cost of goods sold．

·Explain why the costs of putting goods into a saleable condition should be charged to the trading account． MEhWtwsJRYRq30t9X+NT9WP+ZUdZlE55nFcHF3ycudEhJFg+77LXuJiykDEMd2YQ