Question

Select the most appropriate alternative from those given below and rewrite the statement.

All indirect expenses are debited to_________________ account.
a) trading
b) capital
c) profit and loss
d) current

Answer 1

All indirect expenses are debited to Profit & Loss Account.

Explanation: These expenses are not directly related with the production of goods. But they must be accounted for in order to calculate the true net profit earned or net loss incurred during the year. So, all the indirect expenses are debited to Profit & Loss Account.