[GNC] Another "multi-account" logical issue - any advice on how to register this?

[Murugan Mariappan]

Inbound shipping costs (freight-in): If the shipping charges are for transporting raw materials or inventory to your business (i.e., costs incurred to bring goods to your warehouse or manufacturing facility), these are typically included in COGS. These costs are part of what it takes to get the goods ready for sale.

Outbound shipping costs (freight-out): Shipping charges incurred when delivering goods to customers are generally not included in COGS. These are often classified as selling expenses or operating expenses. However, some companies choose to include outbound shipping in COGS if it is integral to delivering the product, but this depends on accounting policies

>From a personal capacity, inbound shipping cost should be part of the cost and outbound should be expensed as operational.





Saludos Cordiales


Murugan

________________________________
From: gnucash-user <gnucash-user-bounces+m.muruganandam=hotmail.com at gnucash.org> on behalf of Chris Miller via gnucash-user <gnucash-user at gnucash.org>
Sent: 02 October 2024 11:28
To: Boniforti Flavio <boniforti.f at gmail.com>
Cc: GnuCash users group <gnucash-user at gnucash.org>
Subject: Re: [GNC] Another "multi-account" logical issue - any advice on how to register this?

Hi Flavio,

> I will think about whether I want to consider the shipping expense as part
> of the value of the goods I bought or not. I understand the difference and
> keeping shipping costs separated from the goods value looks correct to me.
> However, I always considered shipping costs as part of the goods value. I
> thought "I paid 220 for this guitar, even though 20 are for shipping, so to
> me it's worth 220" (I know this is wrong, because shipping doesn't add
> value to the goods).

It is not wrong. Shipping does add to the value. The difference between potatoes in a field and potatoes in a store is basically shipping. You pay more for potatoes in a store because there is a cost to get them there.

You paid $200 for the guitar and $20 for shipping. If you sold the guitar for $200, are you breaking even?

The book value of an asset is the cost to acquire and deploy that asset. Shipping is clearly an acquisition or deployment cost.
--
Chris.
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