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What type of office salaries, advertising, and sales commissions are the examples?



A. Financial Expenses
B. Operating Expenses
C. Marketing Expenses
D. Direct Expenses
Asked by D.Hadenr, Last updated: Jan 08, 2020

This question is part of

MGT101- Financial Accounting 01

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2 Answers

M. Kennedy

M. Kennedy, Web Content Writer, Denver

Answered Feb 20, 2019

The correct answer is option B
Operating expenses is also known as operating expenditure, operational expenditure or operational expense.

These expenses are expenditures that a business incurs to engage in activities associated with the production of goods or services. It is the expense required for the day to day running and functioning of a business.

It is the cost of developing non consumable parts for the product or system. These expenses are reported on the company’s income statement. Examples of operating expenses may include: office salaries, cost of advertising, rents and sales commissions.

Financial expenses is wrong because it deals with the expenditure incurred by an organization which represent interest payable on loan, taxes and in renting an asset property.

The marketing expense is also wrong because it includes the production cost of goods and services they are the indirect expenses done in the organization. Direct expense is also wrong because it include cost of sales of goods.

 

John Smith

John Smith

Answered Sep 08, 2016

Operating expenses-becausean operating expense, operating expenditure, operational expense,operational expenditure or opex is an on-going cost for running aproduct, business, or system. its counterpart, a capital expenditure(capex), is the cost of developing or providing non-consumable partsfor the product or system. for example, the purchase of a photocopieris the caand the annual paper and toner cost is the opex. for largersystems like businesses, opex may also include the cost of workers andfacility expenses such as rent and utilities.
 

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