Indirect Expenses List

Meaning with Some Examples

An indirect expense is an expense incurred by a firm that is not directly related to the core business operations. To ensure the success of a business indirect expenses must be incurred, but they cannot be directly linked to the costs of its core product/service offering. In this article we try and provide a comprehensive indirect expenses list.

For example, the salary paid to sales and marketing employees by Toyota is an important expense for successful business operations, however, the cost of such expense may not directly relate to the cost of producing a car.

Indirect expenses are shown in the income statement (or) profit and loss account on the debit side.

Related TopicIs Expense a Debit or Credit?

 

List of Indirect Expenses

Following is a list of some commonly seen indirect expenses;

  1. Salaries (Note – Wages are treated as a direct expense)
  2. Office Rent
  3. Office Electricity / Office Lighting
  4. Printing & Stationery
  5. Postage, Courier, Telephone & Telegram
  6. Freight on Sales / Freight Outward
  7. Carriage on Sales / Carriage Outward
  8. Delivery Vehicle Expenses
  9. Insurance Expenses / Insurance Premium (Note- Life Insurance Premium would be treated as drawings in case of a sole proprietary business)
  10. Interest on Loan
  11. Discount Allowed / Discount on Debtors
  12. Bad Debts / Further Bad Debts / Bad Debts written off
  13. Depreciation
  14. Loss of Goods by Fire / Theft / Damage
  15. Insurance
  16. Miscellaneous Expenses / General Expenses
  17. Conveyance
  18. Sundry Expenses
  19. Travelling Expenses
  20. Bank Charges
  21. Business Promotion Expenses
  22. Legal & Accounting Charges
  23. Rents, Rates & Taxes
  24. Repairs & Renewals
  25. Interest
  26. Telephone Expenses
  27. Advertisement & Marketing
  28. Salesmen Commission
  29. Trade Expenses
  30. Packing & Store Supply Expenses
  31. Audit Fees
  32. Amortization
  33. Commission to Agents
  34. Utility Expenses
  35. Business & Administration Expenses
  36. Sales & Marketing Expenses
  37. Staff Welfare (including goods distributed among staff members for their welfare)
  38. Boxes & Labels
  39. Brokerage
  40. Charity / Donation
  41. Distributive Expenses
  42. Establishment Expenses
  43. Export Duty
  44. Stable Expenses
  45. Keep car & Vans
  46. Maintenance Charges (provided these are not incurred on an asset at the time of its purchase)
  47. Entertainment Expenses
  48. Loss on Sale of an Asset
  49. Goods given as Free Samples
  50. Depletion Expense
  51. Freight & Carriage
  52. Provision for Bad Debts or Doubtful Debts or Discount on Debtors (at the time of creation, such provision is treated as an Indirect Expense)
  53. Remuneration
  54. Honorarium
  55. Fringe Benefits
  56. Quality & Testing Fee

We update the list periodically to reflect new indirect expenses used around the world.

Related TopicWhere are Trading Expenses shown in Final Accounts?

 

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Indirect Expenses List

 

>Read Process of preparing an income statement from the trial balance