Profit and loss statements - Direct expenses | en - 262 - 25120
Loading

FLASH SALE: 25% Off Certificates and Diplomas! Sale ends on Friday, 14th August 2020

Claim My 25% Discount
Previous Topic Previous slide Next slide Next Topic
New course

This Course has been revised!

For a more enjoyable learning experience, we recommend that you study the mobile-friendly republished version of this course.

Take me to revised course.

- or -

Continue studying this course

Direct expenses

  • Study Reminders

    Set your study reminders

    We'll email you at these times to remind you to study

    You can set up to 7 reminders per week

    You're all set

    We'll email you at these times to remind you to study

    Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +
  • Study Notes
  • Discuss This Topic
    BabaJide Martins F.
    TR
    BabaJide Martins F.

    What are the direct expenses? Can anyone explain direct expenses on this topic?

    Morne V.
    ZA
    Morne V.

    Sales of a organization may be the basis for the allocation of expenses, however, the expense has to be directly linked to sales

    Odongo M.
    UG
    Odongo M.

    Accounting -> Direct expenses Direct expenses Allocation of expenses between departments is intended to assist in providing information about the contribution of each department to the earning of profits but this objective will not be achieved unless the allocation provides a good approximation of the true cost involved. Sales may be the basis for the allocation of expenses, however, the expense has to be directly linked to sales. Floor space is another way of allocating expense. However, the following example indicates the problem in using that as a basis for expense allocation. Two departments may have equal floor space yet one department is on the top floor and the other is at ground level. The ground level location has more chance of gaining from passing traffic, people browsing and so on and so would be a more valuable location. Classification is another area for discussion.

    Manish K.
    NP
    Manish K.

    direct expenses occur for buying business items (raw materials) and manufacturing for getting gross profit of an organization. Importantly, sales may be the basis for allocation of expenses.

    Penelope M.
    US
    Penelope M.

    agreed

    Adil N.
    MA
    Adil N.

    What are direct expenses of profit and loss statements?

    Gloria N.
    AE
    Gloria N.

    Allocation of expenses between departments is intended to assist in providing information about the contribution of each department to the earning of profits but this objective will not be achieved unless the allocation provides a good approximation of the true cost involved.

    Epie E.
    TH
    Epie E.

    understood.

    Epie E.
    TH
    Epie E.

    spercifically,what are direct expenses?

    Owusu E.
    GH
    Owusu E.

    Direct expenses enable management to know how each department is contributing to profit.

  • Text Version
Notification

You have received a new notification

Click here to view them all