Instructions

This exercise should be completed after reading pages 83-84 (Expenditure in the statement of profit or loss) of Chapter 3.

Listed below are items of expenditure incurred by a house building company. Think about whether the house building company would classify these items of expenditure as Cost of Sales, Distribution Costs or Administration Expenses.

a)	Cement	Choose... Cost of sales Distribution and selling costs Administration expenses
b)	Glass	Choose... Cost of sales Distribution and selling costs Administration expenses
c)	Accountancy costs	Choose... Cost of sales Distribution and selling costs Administration expenses
d)	Stationery	Choose... Cost of sales Distribution and selling costs Administration expenses
e)	Audit fee	Choose... Cost of sales Distribution and selling costs Administration expenses
f)	Advertising	Choose... Cost of sales Distribution and selling costs Administration expenses
g)	Sales director’s salary	Choose... Cost of sales Distribution and selling costs Administration expenses
h)	Window and door frames	Choose... Cost of sales Distribution and selling costs Administration expenses
i)	Builders’ salaries	Choose... Cost of sales Distribution and selling costs Administration expenses
j)	Roof tiles	Choose... Cost of sales Distribution and selling costs Administration expenses
k)	Bricks	Choose... Cost of sales Distribution and selling costs Administration expenses

 

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