Direct Expense vs Indirect Expense vs Misc Expense | Cost of Goods Sold vs Operating Expense vs Non Operating Expense | Business Expenses |

Indirect expenses are those expenses that are incurred to operate a business as a whole or a segment of a business, and so cannot be directly associated with a cost object, such as a product, service, or customer. A cost object is any item for which you are separately measuring costs.

 Here, you will notice that the direct expenses incurred by the Business has been deducted under Trading report computing the Gross Profit/Loss.

Whereas, the Indirect Expenses has been deducted  from the Gross Profit directly under Profit and Loss report to compute the Net Profit/Loss.