Match List-I with List-II
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List-I Expenses incurred to earn the income |
List-II Explanation |
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(A). Purchase of Stock-in-trade |
(I). Expenses towards interest charges during the year on the borrowings |
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(B). Employees benefit expenses |
(II). Diminution in the value of fixed assets |
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(C). Finance cost |
(III). Purchases of goods for the purpose of trading |
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(D). Depreciation |
(IV). Expenses incurred on employees towards salary, wages, leave encashment, staff welfare, etc |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A)-(III), (B)-(IV), (C)-(I), (D)-(II)
These are expense heads of a company’s Statement of Profit and Loss; each head is named after the cost it collects.
(A) Purchase of Stock-in-trade — this matches (III). It covers goods bought for trading, that is, for resale.
(B) Employees benefit expenses — this matches (IV). It covers what is spent on employees: salary, wages, leave encashment, staff welfare.
(C) Finance cost — this matches (I). It covers interest on borrowings for the year; bank charges go to other expenses.
(D) Depreciation — this matches (II). It is the fall in the value of fixed assets charged for the year.
NCERT (2026-27 edition):
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