Difference between Return Outwards and Carriage Outwards
Basis |
Return Outwards |
Carriage Outwards |
---|---|---|
Definition |
Return Outwards, also known as Purchases Returns or Purchases Allowances, refers to goods that a business returns to its suppliers or vendors. |
Carriage Outwards, also known as Delivery Expenses or Freight Outwards, refers to the transportation costs incurred by a business to deliver goods from its premises to customers or other locations. |
Nature |
Return Outwards involve goods being sent back to suppliers due to various reasons such as defects, overstocking, or ordering errors. |
Carriage Outwards involve the costs associated with delivering goods from the seller’s location to the buyer’s location or other specified destinations. |
Accounting Treatment |
In accounting, Return Outwards are recorded as deductions from purchases or accounts payable to reflect the decrease in inventory or the reduction in the amount owed to suppliers. |
In accounting, Carriage Outwards are typically treated as selling expenses and are recorded separately from the cost of goods sold. These expenses reduce the gross profit of the business. |
Purpose |
The primary purpose of Return Outwards is to manage inventory efficiently, rectify purchasing errors, and maintain positive relationships with suppliers. |
The focus of Carriage Outwards is on covering the costs associated with delivering goods to customers or other specified locations, ensuring timely and efficient delivery of products. |