Direct and Indirect Expense in Tally Prime

 Difference between Direct and Indirect Expense

Expense

All the expenses incurred in making and selling the goods is called expenses. Expenses Decrease Capital.

There are two types of expenses.

1) Direct Expenses

2) Indirect Expenses

Direct Expenses

Direct expenses are those expenses which the businessman spends in

purchasing or manufacturing the goods.

And till the time he starts selling the goods, all the expenses are included in it.

Direct expenses increase the price of the goods.

All the expenses incurred in the production of goods are called direct

 expenses.

Example-

1) Manufacturing Production Expenses

2) Factory Electricity Bill Pay

3) Factory Rent

4) Wages Pay

5) Freight Pay

6) Repairing Expenses

7) Labor Pay

 

Indirect Expenses

Indirect expenses are those expenses which are related to the sale of goods

and office.

Such expenses are not related to the production of goods, they are called

indirect expenses.

Example-

1) Donation Pay

2) Salary Paid

3) Audit Fees

4) Telephone Expenses

5) Bank Loan Interest

6) Advertisement Paid

7)Tea Expenses