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Direct expenses comprise all those expenses incurred in bringing the goods to the place of business or trade or in-production process till the goods are placed in saleable places. The subsequent expenses may be taken as direct expenses:
1. Wages paid to workers concerned in production are debited to the trading account given the manufacturing account is not prepared individually
2. Carriage and freight inwards are transportation expenses incurred to take the goods or raw material to the position of the business or to the firm's go down/factory. These expenses, if paid or outstanding then are debited to trading account.
3. Octroi is paid while goods enter municipal limits. It paid upon goods purchased is a direct expense and is debited to trading account.
4. Custom duty paid upon importing goods for selling purposes is debited to trading account. Whether the duty is paid on sales export, this amounts to selling expenses and is shown in the loss and profit account.
5. Factory rent, insurance, lighting and power and heating are the expenses incurred to convert raw material in finished goods. These expenses are debited to trading account.
This includes both cash and credit sales of goods. From this demonstration of total sales, sales return also termed as Returns Inward, if any then is deducted in the inner column a
The subsequent items are debited in the profit and loss account as: 1. Administrative expenses comprising office salaries, office lighting, office rent, printing, director's fee
Explain in Details Return on Investment
Objectives of final accounts describe Final Account; know their objectives and preparation of Trading and Loss and Profit Account; find out the difference among Trad
Inventory Within a trading firm, inventory is merchandise held for sale to customers into the ordinary course of business. In condition of manufacturing firms, inventory would
The term goods refer to articles that are traded through the firm articles bought for resale. For illustration, for book seller, books are goods, for an electrical store fans, fo
The Financial Executives Institute is an organization established in 1931 whose members are mainly financial policy-making executives. Several of its members are chief financial of
2. Now assume that you have been asked how to account for the destroyed drilling operation in the Gulf of Mexico in terms of the destroyed rig and lost natural resources. For the p
Need solution Corporate Financial Accounting Chapter 3 and Chapter 4: Complete PR 3-4A on page 137 using appropriate software. Complete EX 4-4 on page 187 using appropria
Standardization in UK and USA: although the Institute of Chartered Accountants in England and Wales began creating recommendations as 1942, real progress started along with the es
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