Explain the Difference Between Direct and Indirect Expenses in Accounting

question 126

Essay

Explain the difference between direct and indirect expenses in accounting for departments.

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Definitions:

Voucher System

A control mechanism in accounting that requires all company expenditures to be documented with vouchers, supporting the authenticity of transactions.

Accounts Receivable

Outstanding receivables from clients to a business for supplied products or executed services awaiting payment.

Internal Control

Internal Control encompasses the policies, procedures, and actions implemented by a company to ensure the integrity of financial reporting, compliance with laws and regulations, and effective and efficient operations.

Cost-Benefit

An analysis or approach that compares the costs and benefits of a decision, project, or action to determine its feasibility or profitability.