Which of the following is a not a indirect expense? |
Wages Salaries Rent of building Bad debts |
Wages |
The correct answer is option 1- Wages. Wages is a direct expense. Direct expenses means all expenses directly connected with the manufacture, purchase of goods and bringing them to the point of sale. Direct expenses include carriage inwards, freight inwards, wages, factory lighting, coal, water and fuel, royalty on production, etc. Wages is treated as direct expense. The indirect expenses are transferred to the debit side of the second part, viz. profit and loss account. |