Question

A firm wants to classify its expenses by nature (salaries, depreciation, rent, etc.) in its Income Statement. According to Schedule III of Companies Act, which presentation format is it adopting?

Q: Answer-A firm wants to classify its expenses by nature (salaries, depreciation, rent, etc.) in its Income S...

Classifying expenses by type nature rather than function e.g., admin, selling is known as natural classification and is permitted under Schedule III for companies.

A Functional classification

B Vertical classification

C Natural classification

D Consolidated format

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A firm wants to classify its expenses by nature (salaries, depreciation, rent, etc.) in its Income Statement. According to Schedule III of Companies Act, which presentation format is it adopting?

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