Direct expenses, Accounting Standards

Assignment Help:

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.


Related Discussions:- Direct expenses

Net sales, This includes both cash and credit sales of goods. From this dem...

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

Items in the profit and loss account, The subsequent items are debited in t...

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

Pruthviraj, Explain in Details Return on Investment

Explain in Details Return on Investment

Objectives of final accounts, Objectives of final accounts describe ...

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, Inventory Within a trading firm, inventory is merchandise he...

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

Transactions relating to goods, The term goods refer to articles that are t...

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

Financial executives institute, The Financial Executives Institute is an or...

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

Retirement, 2. Now assume that you have been asked how to account for the d...

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

CIB-200 Accounting Fundamentals, Need solution Corporate Financial Account...

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

Attempts towards standardisation, Standardization in UK and USA: although ...

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

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd