Question

State whether the following statement are True or False:
Fuel and Diesel comes under Indirect Expenses.

• A. True
• B. False

Answer 1

The correct option is B False

All the direct expenses are debited to Manufacturing/ Tarding Account. Indirect expenses are debited to Profit & Loss Account.

Expenses which are directly related with the manufacturing or trading activity considered as direct expenses and expenses which are more of administrative nature related to business but not associated with direct business activity are called indirect expenses.

Fuel and Diesel are direct expense need to be debited to manufacturing account.