Which of the following items of expense involves actual cash payment?
Answer Details
The item of expense that involves actual cash payment is "Carriage outwards." This expense refers to the cost of shipping or delivery of goods from the seller's premises to the buyer's premises or to a third party. It is an expense that the seller incurs in order to fulfill the sale, and it requires an actual payment of cash to the carrier or delivery service provider.
Discounts allowed, provision for depreciation, and allowance for doubtful debts do not involve actual cash payment. Discounts allowed are reductions in the selling price of goods or services that the seller grants to the buyer, and they result in a lower amount of revenue for the seller. Provision for depreciation is an accounting entry that represents the estimated decrease in value of a fixed asset over time, and it does not involve an actual payment of cash. Allowance for doubtful debts is an estimate of the amount of accounts receivable that the seller does not expect to collect, and it is also an accounting entry that does not involve an actual payment of cash.