Understanding Direct Indirect Expenses and income

Accounts and Finance
Step 1 Basic of Accounts - Debits and Credits

Those expense which are related to business are  Direct Expenses

All others are Indirect Expenses .

For example

For a factory , salary paid to workers is Direct Expense but salary paid to accountant is an Indirect Expense

(as workers are directly used in manufacturing process)

But for a CA Firm , salary paid to accountant is an direct expense (as accountant are directly used in accounting process)

Q1

Suppose a Chemist Shop purchases Medicines for 300000

It also pays 20000 freight to truck operator who brings the medicines

It sells the Same for 400000

Calculate Profit and Loss

Q2

Suppose a Factory purchased Plastic for Rs 100000

It paid 30000 Salary to Labour who converted the same into Plastic Bottles
It also paid 10000 salary to accountant for making books of accounts
It sold Plastic Bottles for Rs 170000

Q 3

Make Trading and Profit and Loss Account

Q - 4

Resolve Q3 assuming there is

 Opening Stock 50000 Closing Stock 40000

Q 5 -

Suppose a person has Purchase and Sales of 60000 and 70000

He took a loan from bank of [email protected]% per annum

He gave loan to his friend whole [email protected] 9% per annum

Calculate Profit and Loss

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