Can You Describe The Expenses And Its Categories?

Expenses:
Expenses means the expired cost incurred for earning revenue of a certain accounting period. They are the cost of the goods and services used up in the process of obtaining revenue. In other words, it becomes possible to earn revenue with the help of expenses. For example, purchase of goods, wages, salaries, rent, carriage, customs duty etc. We have to incur all these expenses in order to earn revenue.Expenses are mainly divided into two categories. They are direct expenses and indirect expenses.

Direct Expenses: Expenses connected with purchase of goods are known as "Direct expenses", For example, Freight, insurance of goods in transit, carriage, wages, customs duty and import duty etc. Without incurring these expenses, it is not possible to bring the goods from the purchase point to the go-down of the business. Such expenses are collectively known as direct expenses.
Indirect Expenses: All the expenses other than direct expenses are assumed as indirect expenses. Such expenses have no relationship with purchase of goods. For example, rent of building, salaries to employees, legal charges, insurance of building depreciation, printing charges etc.

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