If a business decided to classify its expenses under the headings 'Selling and Distribution,' 'General and Administrative' and 'Financial,' into which groupings would 1. depreciation of sales staff's motor vehicles and 2. bad debts written off, fall?
A)1. general and administrative; 2. financial.
B)1. selling and distribution; 2. financial.
C)1. financial; 2. selling and distribution.
D)1. selling and distribution; 2. general and administrative.

Question

Quizplus · Accepted Answer

1. Depreciation of sales staff's motor vehicles is related to selling and distribution as it is an expense related to the process of selling and distribution.
2. Bad debts written off falls under financial as it is related to accounts receivables and cash management, which are part of financial activities.

If a Business Decided to Classify Its Expenses Under the Headings