Question

differentiate between direct and indirect income give one source of each type​

Answer 1

Answer:

its simple

Explanation:

Direct income is one which is earned directly by way of business activities.

Example: Salaried, Professionals

Indirect income is one which is earned by way of non-business activities. For example, sale of old newspapers, sale of carton boxes, etc.

Example: Sale of Fixed Asset

Coming to Expenses:

Direct as the word suggests are those expenses which are completely related or assigned to the core business operations. They are mainly related to purchases and production of goods/services. Direct expenses are a part of the prime cost or the cost of goods/services sold by a company.

Direct expenses can differ for different types of companies, such as manufacturing companies, construction companies, servicecompanies, etc.

Direct expenses are shown on the debit side of a trading account.

Examples

Wages, Factory rent, Material Cost, Premises Renting, Fuel, Freight, Carriage Inwards etc.

Indirect Expenses

Unlike direct, indirect expenses are not directly related or assigned to the core business operations. Indirect expenses are necessary to keep the business up and running, but they can’t be directly related to the cost of the core revenue generating goods or services.

Indirect expenses can be different for different types of companies such as manufacturing, construction, service companies etc.

Indirect expenses are shown on the debit side of an income statement.

Examples

Salaries, Telephone bills, Printing & Stationery, Legal & Accounting charges, Carriage Outwards etc.

Hence, i hope this will be helpful to guide to for the basics of your query.

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