Question

Which are indirect income of the following

Answer 1

Answer:

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Explanation:

Indirect expenses are shown on the debit side of an income statement. Salaries, Telephone bills, Printing & Stationery, Legal & Accounting charges, Carriage Outwards etc.

Answer 2

Complete question:

Which are indirect income of the following?

a) Commission Received

b) Interest on Investment

c) Dividents Received

d) All of the above

d) All of the above are indirect incomes.

Indirect income:

"Indirect income is the revenue that a business generates through channels that are not directly related to its day-to-day operations"

Characteristics of indirect income:

• Indirect income involves earnings from non-business activities. Few examples for indirect income involves selling old newspapers, used papers, recycling wastes, etc.
• It also includes earnings from the dividents obtained, sale of assets, commissions, and interest obtained from investments.
• Indirect income aids in the calculation of the net profit of the business firm, unlike direct income which provides with gross calculation of profit.
• The financial statement of such indirect incomes are recorded in the profit and loss account while the direct incomes are accounted in the trading account.