Carriage inwards and outwards

Carriage inwards is transport cost on purchases and is added to the cost of inventory; carriage outwards is transport cost on sales to customers and is a selling expense.

ByHoang TruongUpdated July 11, 2026

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Buying goods for €8,000 and paying €400 to bring them to the warehouse adds carriage inwards to inventory cost, giving €8,400. Selling that inventory for €15,000 gives gross profit of €6,600. Delivering to customers then costs €250 of carriage outwards, a selling expense deducted after gross profit, leaving €6,350.

Where it fits

SubjectFinancial AccountingCoreTopicRevenue, Expenses & ProfitCoreTopicInventory & COGSCore

The formula

LaTeX

P = V + C_{in}

Variables

$P$: Cost of purchases (€)
$V$: Invoice price of purchases (€)
$C_{in}$: Carriage inwards (€)

Carriage inwards is added to the cost of purchases; carriage outwards is excluded and expensed separately instead.

Check yourself

PracticeCORE

A business buys goods costing €12,000 and pays €600 to transport them to its own warehouse (carriage inwards). It separately pays €350 to deliver goods to a customer (carriage outwards). What is the cost of purchases figure used in calculating cost of goods sold?

Select an answer to check your understanding.