Question

Observe the image and state in which will this item be posted?

विकल्प

• Profit and Loss Account debit side

• Profit and Loss Account credit side

• Trading Account credit side

• Trading Account debit side

Answer 1

Trading Account debit side

Explanation:

Octroi is a direct cost of purchases (a tax on goods entering the town) and increases the cost of goods sold; therefore, it is recorded as a direct expense on the debit side of the Trading Account.