Is Depreciation a Direct or Indirect Expense

DEPRECIATION IS A DIRECT EXPENSE OR INDIRECT EXPENSE

WHY DEPRECIATION DEBITED TO P&L A/C
WHY NOT DEBITED TO TRADING A/C

Prakash from India

Prakash, any expense which is connected directly to the production or purchase, will be the direct expense. Any expense or cost which is not connected directly with the production or purchase will be the part of indirect expense. When we add direct material, direct labor cost and direct expense cost, it will be the prime cost. Except this, all will be the indirect expense or cost which will be calculated for finding total cost. In case of depreciation, we see whether depreciation incurred directly with the production or for purchase of goods or not.

1. Fixed Assets which are Used in Plant or Manufacturing

We will include the depreciation of all fixed assets which are used plant in which production is doing in direct expense because this is the part of direct cost.

2. Fixed Asset which are used for Administration and Sales

All fixed assets which are used for administration and sales will be different from above fixed assets. Its depreciation will be the part of indirect expense. For example, we have used Track for delivery the goods to the customer. So, the depreciation of truck is the part of indirect expense because truck is using for sales and distribution not purchase and production. If it is used both sales and purchase. We can divide depreciation both into direct and indirect expense on the basis of time.

All depreciation which is the part of direct expense will be included in the trading account. All the depreciation which is the part of indirect expense will be included in the profit and loss account.

Reviews

.

Meet Your Teacher

Vinod Kumar Prof. Vinod Kumar has received the post graduate degree in Commerce from ... read more »

Students 40000+$desc=Enter your email address for sign up

Name

accounting Accounting Concepts Accounting Education accounting equation Accounting Solutions Algebra Answer the Questions and Become Master Balance Sheet bank Bodybuilding Education Business Business Education Business Environment Business Solutions CA Calculus cameras car Car Driving Course Career Solutions carpentry Computer Computer Basics Computer Hardware Computer Networking Computer Software Computer Solutions cooking education Corporate Accounting Corporate Law cost cost accounting CSE Dailymotion depreciation determinant drawing Driving Education e-accounting earn money Economics Education Education Education Solutions Electronics Email Events Examination Finance Education Finance Solutions financial Financial Accounting FIR Football Gambling Gambling Addiction Goldsmith Google Adsense Guest Writers Health Education Help History Home Building Home Maintenance amp; Repair Index Number India Indian Language Inspiration insurance internal audit Internet Internet Forum Jobs amp; Careers Journal journal entries journal entry Kenya Laptop Basics Law Education Law Solutions Learning Lecture Legal Education Linear algebra Linear Programming Malaysia Management Accounting Management Education Management Solutions Marketing Education Mathematics Education matrices Medical and Surgery Education Mobile motivation MS Excel Nepal Nigeria organisation Other Pakistan Personal Finance Philippines Photography Photoshop Software Picture Plumbing Education Probability Profiles provision real estate rectification Relationships amp; Family Religious Studies Result Sahas Saudi Arabia Science Education Self-Learning Skating Slideshow Solution Spiritual Education Sports Statistics Statistics Education stock Story svtuition Tablet Education Tally Tally Solutions Tally.ERP 9 tax Tax Solutions teaching Teaching Education Tech Simplify Test Testimonials Travel Trigonometry tuition TV Shows UK USA variance analysis VAT vector Video Video on Demand videos Vocational Education Web design website Wife Window Movie Maker Wordpress working capital Youth youtube
false
ltr
item
Svtuition: Is Depreciation a Direct or Indirect Expense
Is Depreciation a Direct or Indirect Expense
Svtuition
http://www.svtuition.com/2012/08/is-depreciation-direct-or-indirect.html
http://www.svtuition.com/
http://www.svtuition.com/
http://www.svtuition.com/2012/08/is-depreciation-direct-or-indirect.html
true
3065238051582539150
UTF-8
Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES Demos View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH All Demos Not found any Demo match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock