What are the two kinds of expenses appear in trial balance?

These are direct expenses and indirect or operating expenses.

What are the list of indirect expenses?

These are office and sdministrative expenses, marketing and selling expenses and financial and other expenses

Direct and Indirect Expenses | List, Examples, and FAQs

Expenses

An expense is a cost that has been incurred in the process of earning income and revenue. In simple words, the costs of doing business are called expenses.

Examples of expenses include routine expenses such as purchases, salaries, commissions, and utility bills.

Expenses that appear in the trial balance are one of the following two kinds:

Direct expenses

Indirect or operating expenses

Direct Expenses

Direct expenses are any expenses incurred to manufacture or purchase goods and to bring them into saleable condition. Direct expenses become part of the cost of the goods manufactured or purchased.

Direct expenses can be thought of as any costs other than materials and wages. They are incurred for a specific product, and if they were not incurred, the production of that specific product would not be possible.

Example

Consider the example of royalties paid to a book author. An author's effort is not direct material nor direct labor, yet it is essential for producing the book.

Similarly, a company may acquire the rights to manufacture a product whose patent or trademark rights are held by another company.

They may agree to pay a small fee or royalty to use the trademark or formula for production.

In real-world accounting practice, there are very few items that are classified as direct expenses. Generally, the heading Direct Expenses is ignored in the preparation of accounting statements.

Indirect Expenses

Expenses incurred to sell goods and to operate the business are called indirect expenses (or operating expenses). These expenses are classified into the following three groups:

Office and administrative expenses

Marketing, selling, and distribution expenses

Financial and other expenses

List of Direct Expenses

Purchases	Carriage	Carriage In
Carriage Inward	Carriage on Purchases	Transportation Inward
Cartage	Freight	Railway Charges
Insurance in Transit	Packing Charges	Landing and Wharf Charges
Dock Charges	Clearing Charges	Import Duty
Excise Duty	Custom Duty	Octroi Duty
Wages	Wages and Salaries	Manufacturing Wages
Wages Productive	Factory Wages	Manufacturing Expenses
Warehouse Charges	Factory Rent	Factory Electricity
Factory Light	Factory Lighting and Heating Expenses	Factory Insurance
Factory Rates	Motive Power: 1. Gas 2. Fuel 3. Power 4. Coal 5. Coke	Consumable Stores: 1. Lubricating Oil 2. Grease 3. Cotton Waste
Raw Materials: 1. Tallow 2. Cotton Seeds 3. Oil Seeds 4. Jute	Royalty

List of Indirect Expenses

1. Office and Administrative Expenses

Salaries	Office Salaries	Salaries and Wages
Establishment Charges	Office Rent	Rent, Rates, and Taxes
Office Expenses	Postage and Telecom	Office Telephone Charges
Printing and Stationery	Office Electricity	Legal Charges
Insurance	General Managers Commissions	General Expenses

2. Marketing and Selling Expenses

Sales Salaries	Sales Expenses	Carriage Out
Carriage outward	Freight Outward	Delivery Expenses
Advertisement	Warehouse Rent	Commission (Dr.)
Salesmen and Managers Commission	Agent and Traveler's Commission	Traveling Expenses
Discount Allowed	Sales Allowance	Bad Debts and Provisions/Reserves
Distribution of Free Samples	Trade Expenses and Subscriptions	Packing and Store Supplies Expenses

3. Financial and Other Expenses

Bank Charges	Interest on Overdraft	Interest on Loan
Interest on Capital	Audit Fee	Financial Charges
Depreciation	Depletion	Amortization
Repairs and Maintenance	Repairs and Renewals	Loss on Sales of Assets
Loss by Theft	Loss by Accident	Loss by Fire
Discount on Discounted Bill	Sundry Expenses	Miscellaneous Expenses

Direct and Indirect Expenses FAQs