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Question
Observe the image and state in which will this item be posted?
Options
Profit and Loss Account debit side
Profit and Loss Account credit side
Trading Account credit side
Trading Account debit side
MCQ
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Solution
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.
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