Different types of Expenses

Dear friends
In accounting, there are only revenue nature and capital nature expenses. Revenue nature expenses records in profit and loss account while capital nature expenses are recorded in balance sheet.

Revenue expenses are again subpart of direct expenses and indirect expenses

Direct expenses are the main type of expenses which are related to production and purchase of goods. These expenses are incurred during the purchase of goods and transfer to trading account. I am giving the examples of direct expenses:-

Ø Wages

Ø Freight

Ø Carriage

Ø Carriage inward

Ø Octrai

Ø Royalty on production

Ø Factory expenses

Ø Factory depreciation

Ø Fuel , oil and power

Ø All other expenses related to purchase of goods

Indirect Expenses

Ø Office expenses

Ø Sales expenses

Ø Advertising

Ø Administrative expenses

Ø Bad debts

Ø Depreciation of office assets

Ø Interest on loan

Ø All other expenses relating to sale and marketing