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- Name – Quiz 23 – Direct and Indirect Expenses – (Answers)
- Topic – Direct and Indirect Expenses
- Answers with Explanation
Q1. Which of the following is usually not a direct expense?
Ans. Bad Debt is usually an indirect expense.
Q2. Which of the following is usually not an indirect expense?
Ans. Fuel is directly related to the business’s core activity and is therefore not an indirect cost.
Q3. Indirect expenses are shown in _____.
Ans. Indirect expenses appear on the debit side of a profit & loss account.
Q4. Direct expenses are shown in _____.
Ans. Direct expenses appear as debits on a trading account.
Q5. Printing & stationery is mostly _____.
Ans. It is difficult to attribute the cost of printing & stationery to the company’s core products or services, which is why printing & stationery costs tend to be indirect.
Q6. Cost of raw material is mostly a _____ expense.
Ans. ‘Raw material’ is categorized as a direct expense on the company’s books of accounts because they contribute directly to the making of a product or delivery of a service.
Q7. Carriage outwards is a direct expense.
Ans. The given statement is False. Carriage inwards is a direct expense whereas carriage outwards is an indirect expense.
Q8. Carriage inwards is a direct expense.
Ans. The given statement is True. Carriage inwards is a direct cost for the business.
Q9. Direct expenses are included in _____.
Ans. Direct expenses are included in the cost of goods sold by a company.
Q10. Indirect expenses are _____ to keep the business running.
Ans. Indirect expenses are necessary to keep a business functioning, but they cannot be directly tied to the costs of core revenue-generating products or services.
Q11. Direct expenses are primarily related to producing _____.
Ans. They are mostly related to purchases and production of goods/services.
Q12. Indirect expenses are completely related and assigned to _____.
Ans. Unlike direct, indirect expenses are not directly related and assigned to the core business operations of a firm.
Q13. Direct expenses are completely related and assigned to _____.
Ans. Direct expenses are completely related to the core business operations of a company.
