Brokerage commission is which expense? Direct or indirect.

Question

Answer

Brokerage Commission Expenses: Direct or Indirect?

Introduction

Brokerage commission is the fee charged by a broker for acting as an intermediary between the buyer and the seller of a financial instrument like stocks, bonds, or commodities. It is a crucial expense for investors engaging in buying or selling securities. In accounting, expenses can be either direct or indirect, depending on their relation to the core business operations. Therefore, it is essential to determine whether brokerage commission is a direct or indirect expense.

Direct Expenses

Direct expenses are the costs incurred in the production or sale of goods or services that can be directly attributed to the cost of the product or service. They are an essential part of the production process, and without them, the company would not be able to produce or sell its products or services. Examples of direct expenses include:

Raw materials

Direct labor

Direct utilities

Direct rent

Direct depreciation

Indirect Expenses

Indirect expenses are the costs that are not directly related to the production or sale of goods or services. They are necessary for the operation of the business but cannot be directly attributed to any particular product or service. Examples of indirect expenses include:

General and administrative expenses

Office rent

Office supplies

Advertising and promotion

Insurance

Brokerage Commission: Direct or Indirect Expense?

Brokerage commission can be classified as either a direct or indirect expense, depending on the nature of the business. For a company that is engaged in the business of buying and selling securities, brokerage commission is a direct expense. This is because it is an essential part of the business operation, and without it, the company would not be able to buy and sell securities. On the other hand, for a company that is not engaged in the business of buying and selling securities, brokerage commission is an indirect expense. This is because it is not directly related to the production or sale of goods or services.

Conclusion

In conclusion, brokerage commission can be classified as either a direct or indirect expense, depending on the nature of the business. For a company that is engaged in the business of buying and selling securities, brokerage commission is a direct expense, while for a company that is not engaged in the business of buying and selling securities, brokerage commission is an indirect expense. It is essential to classify expenses correctly to ensure accurate financial reporting and decision-making.

Answer

its may be direct or indirect both

Answer

indirect

Answer

it is an indirect expense...

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I got it thank you..

Answer

indirect

Answer

Indirect because ye sale pe diya jata h or direct exp only manufacturing cost se related hote h

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