Examples of classification of expenses by their nature are:
A) Employee expenses and distribution expenses.
B) Depreciation and marketing expenses.
C) Borrowing costs and distribution expenses.
D) Employee expenses and depreciation expenses.
E) None of the given answers.

Question

Quizplus · Accepted Answer

Classifying expenses by their nature means grouping them based on what they are used for or what they represent. Employee expenses are related to labor costs, while depreciation expenses are related to the decline in value of a company's assets over time. Therefore, option D is the most appropriate classification of expenses by their nature. Option A is more related to the function of expenses, option B is mostly related to the different types of expenses, option C is related to the source of financing and distribution costs, and none of the given options is also incorrect.

Examples of Classification of Expenses by Their Nature Are