Question

Which of these is/are recurring(Indirect) expenses?

• A. Transit insurance and freight
• B. Octroi
• C. Loading and unloading expenses
• D. Godown rent and insurance

Answer 1

Answer: (D)

Godown rent and insurance

Costs incurred by a business in the process of earning revenue are known as expenses. Generally, expenses are measured by the cost of assets consumed or services used during an accounting period. All those expenses which are incurred after the goods have reached consignor's godown are called selling expenses. Selling expenses are also called as recurring expenses. Selling expenses should not be considered for the purpose of valuation of closing stock and abnormal loss. Examples of selling expenses include advertisement expenses, printing and stationary, carriage outward, godown rent, insurance, salaries to employees etc.