Direct and in direct expenses for ca firm

indirect exp

direct exp is related to mfging unit

& indirect is meant for others

 

for eg wages fall under direct exp.

 

 

Dear,

 

Salary is always direct expenses, whether  the salaries is paid by CA firm or any other law firm. salary never directly linked to the nature of the business of firm/ comapany etc.

 

Thanks & Regards

CA Amit Kumar Sikarwar

E-mail- caamitkumarsikarwar @ gmail.com

Please note that in case of professionals like CA/lawyers etc,, we are required to prepare an Income & Expenditure account instead of the P&L account.  In I&E account unlike the P&L there is no concept of direct or indirect expenditure.  All the receipts are credited to the Income side & all the expenses wheter direct or indirect are debited to the expense side.  The balance is either an Surplus or an deficit whihc is transferred to the proprietor's capital account.

Agreed with Giridhar Sir

 

GIRIDHAR S KARANDIKAR JE IS CORRECTELY DEFINE THE SOLUTION TO THE ABOVE  CASE. SALARY OF CA OR ANY DIRECTOR WILL BE TREATED AS INDIRECT EXPENSES ONLY IN A FIRM/COMPANY WHER P&L ACCOUNT PREPARED.

GIRIDHAR S KARANDIKAR JE IS CORRECTELY DEFINE THE SOLUTION TO THE ABOVE  CASE. SALARY OF CA OR ANY DIRECTOR WILL BE TREATED AS INDIRECT EXPENSES ONLY IN A FIRM/COMPANY WHERE P&L ACCOUNT PREPARED.

GIRIDHAR S KARANDIKAR JE IS CORRECTELY DEFINE THE SOLUTION TO THE ABOVE  CASE. SALARY OF CA OR ANY DIRECTOR WILL BE TREATED AS INDIRECT EXPENSES ONLY IN A FIRM/COMPANY WHERE P&L ACCOUNT PREPARED.

Income and expenditure is prepared for non profit organisations. How can a CA prepares income and expenditure account? The answer given above is incorrect. For CA and Lawyers, salary is directly linked with his production (services) and it is direct expense

dear goutham please note that trading and P&L is prepared only in respect of persons carrying on trading and manufacturing activity, and also they are required to maintain stock.
for professionals no trading or manufacturing activity is being carried out and also there's no question of stock except in case of a doctor who is required to maintain a stock of his medicines in the register as prescribed. So an simple Income&Expenditure is being prepared. There is no such concept of direct and indirect exp for I&E account. But if you want to prepare an analysis then it can be considered as direct exp

Your are correct only for these: * Reply about trading and P and L Account * Stock related But further clarity is required for whether Income and Expenditures Account applicable to CA? In my opinion, only NGO(non profit organisations) will prepare I and E Account and not other business and professionals