Following are some of the examples of contingent liabilities:
(i) Claims against the company not acknowledged as debts.
(ii) Uncalled liability on partly paid shares.
(iii) Arrears of fixed cumulative dividends.
(iv) Estimated amount of contracts remaining to be executed but not provided for.
(v) Liabilities under a guarantee.
(vi) Liability on Bills Receivable discounted but not matured.

All other indirect expenses or loss on account of nonoperating transactions are included in this category.
Following are some non-operating expenses:
(i) Charity expenses
(ii) Legal expenses
(iii) Loss on sale of assets
(iv) Loss by theft or fire, etc

Direct expenses are those expenses which are directly related with the quantity of goods produced. In this category, we include expenses incurred on purchase of raw materials/goods and on manufacturing of goods.

The expenditure for which payment has been made or a liability has been incurred in the current year, but deferred from being charged against the income of the current year is called deferred revenue expenditure. Such deference is based on the pre-assumption that it will be of benefit over a subsequent period or periods. These are written off over the period of benefits. For example, a large amount is spent on advertising to launch a new product or to explore a new market.

Net Profit = Operating Profit + Non- operating Income - Non-operating Expenses
= 17,00,000 + 1,50,000 - 3,75,000 = Rs.14,75,000
Net profit earned by M/S Arora and Sachdeva in 2005-D6 was Rs.14,75,000

Cost of goods sold (COGS)is the cost of merchandise that is sold to the customer It includes cost of raw materials purchased, direct expenses incurred, value of opening stock, i.e., the value of the last year 's unsold stock and excludes closing stock, if any, i.e., the value of current year's unsold stock. The formula to calculate COGS is:
Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses - Closing Stock