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Direct expenses, such as carriage inwards and manufacturing charges, are indeed accounted for under revenue accounts. This is because they are directly related to specific revenue transactions, like those found in the trading account. Revenue expenditure encompasses costs tied to generating revenue, differentiating them from capital expenditure.

sankar ponnan

sankar ponnan (Querist)

26 June 2020 SIR
Direct expenses should be accounted under the group of Revenue Accounts? If it is yes, why it should be accounted like that?
pls give me explanation.

thanks in advance

Gokul Sharma

Gokul Sharma (Expert)

26 June 2020 direct exp are the expenses related to trading account.
like carriage inward.....wages....other manufacturing charges.

how can be expenses is revenue.
revenue is basically sales and service rendered.

CA Akshay Jangid

CA Akshay Jangid (Expert)

29 June 2020 Revenue Expenditure are those which are related to specific revenue transactions, such as Cost of Goods Sold or Repairs and Maintenance expense etc.
This is why Direct expenses are categorized as Revenue Expenditure.

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