Match List – I with List – II.

Choose the correct answer from the options given below :

A-IV, B-I, C-II, D-III

The correct answer is Option (4) - A-IV, B-I, C-II, D-III.

* Finance cost- Expenses towards interest charges on borrowing. Finance cost refers to the expenses incurred by a company in the form of interest charges on its borrowings or loans. When a company borrows money, it often has to pay interest on the borrowed amount. This interest cost is considered a finance cost and is reported in the company's income statement. Finance costs can include interest on bank loans, bonds, or any other form of debt.

* Depreciation- Decrease in value of fixed assets. Depreciation is the accounting method used to allocate the cost of a tangible asset (such as machinery, buildings, vehicles) over its useful life. As fixed assets are used over time, they gradually lose their value due to wear and tear, obsolescence, or other factors. Depreciation allows companies to spread the cost of these assets over their estimated useful lives, reflecting the gradual decrease in their value. It is a non-cash expense, meaning no actual cash is paid out, but it is important for accurately representing the true cost of using the asset.

* Employee benefit expenses- Expenses on salary, wages, leave encashment. Employee benefit expenses encompass various costs related to the compensation and well-being of employees, including salaries, wages, and additional benefits. This category includes direct monetary compensation like salaries and wages, as well as indirect benefits such as healthcare, retirement contributions, and leave encashment. These expenses are crucial for attracting and retaining skilled employees and are reported in the company's income statement as a part of the overall operating expenses.

* Purchase of Stock in Trade- Purchase of goods for trading. The purchase of stock in trade refers to the acquisition of goods or inventory that a company intends to sell as part of its regular trading activities. For businesses involved in trading, buying and selling goods is a core operation. The cost of acquiring these goods for resale is recorded as the purchase of stock in trade.