![]() ![]() These expenses include taxes, salaries for employees, depreciation, and interest among others. These types of expenses are usually incurred when the finished goods and services are being sold and distributed. Indirect expenses are the second type of revenue expenditure. Direct expenses also include costs such as electricity used during the production, wages paid to workers, legal expenses, rent, shipping-related costs, and freight charges. For manufacturing companies, examples of direct expenses include the costs that are incurred for the conversion of raw materials to finished products or goods. The costs that are incurred during the day-to-day operations that take place in the business are also direct expenses. Direct expensesÄirect expenses are those costs that are incurred when goods and services are in the process of being produced. ![]() Revenue expenditure can be divided into two categories direct expenses and indirect expenses. Revenue expenditure is recorded during an accounting period or a single year. It involves all costs that are required for the successful running of a business such as salaries for employees and property taxes. For example, if you have a piece of equipment that requires monthly maintenance then the expense will be termed under revenue expenditure. Revenue expenditure is generally spoken to in relation to fixed assets as it records the expenses which have occurred in connection to a fixed asset. Revenue expenditures are short-term expenses that are also known as revenue expenses and operational expenses (OPEX). Both revenue expenditure and capital expenditure are equally important. ![]()
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