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Question
Observe the image and state the account where this expense will be shown.
Options
Trading Account debit side.
Profit and Loss Account credit side.
Trading Account credit side.
Balance Sheet assets side.
MCQ
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Solution
Trading Account debit side.
Explanation:
Customs duty on imported goods is treated as a direct expense added to the cost of purchases (part of the cost of goods sold) and therefore appears on the debit side of the Trading Account.
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