Administrative, selling and distribution expenses in a manufacturing firm are recorded in

Administrative, selling, and distribution expenses in a manufacturing firm are recorded in the profit and loss account. The profit and loss account is a financial statement that shows the revenue, expenses, and net profit of a company during a specified period. These expenses are treated as indirect expenses and are subtracted from the revenue earned during the period to calculate the net profit or loss of the company. The manufacturing account, on the other hand, is used to record the direct costs of production, such as raw materials, labor, and factory overheads. The trading account shows the gross profit of a company by subtracting the cost of goods sold from the net sales revenue. Finally, the balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time.