Question
What is meant by Indirect Expenses? Give two examples.
✓
Answer
Indirect expenses are those expenses that are incurred to operate a business as a whole or a segment of a business, and so cannot be directly associated with a cost object, such as a product, service, or customer. A cost object is any item for which you are separately measuring costs. Examples of indirect expenses are:
- Accounting, audit, and legal fees.
- Business permits.
- Office expenses.
- Rent.
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.
Explore more
Similar questions
Does Profit and Loss Account show the financial position of the enterprise?
Calculate Closing Capital:
Opening Capital ₹ 90,000; Profit for the year ₹ 25,000; Drawings ₹ 17,000. During the year proprietor sold ornaments of his wife for ₹ 40,000 and invested the same in business.
Opening Capital ₹ 90,000; Profit for the year ₹ 25,000; Drawings ₹ 17,000. During the year proprietor sold ornaments of his wife for ₹ 40,000 and invested the same in business.
From the following particulars, prepare Total Creditors Account:
| ₹ | |
| Credit purchases | 2,40,000 |
| Cash purchases | 50,000 |
| payment to creditors | 2,10,000 |
| Discount allowed by them | 5,000 |
| Bills Payable accepted | 30,000 |
| Creditors in the beginning of the year | 90,000 |
Calculate Closing Stock and Cost of Goods Sold:
Opening Stock ₹ 5,000; Sales ₹ 16,000; Carriage Inwards ₹ 1,000; Sales Returns ₹ 1,000; Gross Profit ₹ 6,000; Purchase ₹ 10,000; Purchase Returns ₹ 900.
Opening Stock ₹ 5,000; Sales ₹ 16,000; Carriage Inwards ₹ 1,000; Sales Returns ₹ 1,000; Gross Profit ₹ 6,000; Purchase ₹ 10,000; Purchase Returns ₹ 900.
Why the statement of assets and liabilities prepared under Single Entry System at the end of the accounting period is called a Statement of Affairs instead of Balance Sheet?
Books maintained by the Single Entry System are not as reliable as they are when maintained following the Double Entry System. Comment.
Arrange assets in the order of permanence:
Sundry Debtors, Stock, Investment, Land and Building, Cash in Hand, Motor Vehicle, Cash at Bank, Goodwill, Plant and Machinery, Furniture, Loose Tools, Marketable Securities.
Sundry Debtors, Stock, Investment, Land and Building, Cash in Hand, Motor Vehicle, Cash at Bank, Goodwill, Plant and Machinery, Furniture, Loose Tools, Marketable Securities.
Complete the following Statemant of Profit or Loss:
Why is it necessary to pass the Adjustment Entries?
Give three examples of two-sided errors and two examples of one-sided errors.