Which of the following is an operating expense?
A)Salaries Expense
B)Payroll Tax Expense
C)Purchases
D)Both A and B are correct.

Question

Quizplus · Accepted Answer

Operating expenses are those expenses that are necessary for the day-to-day operations of a business. Salaries expense and payroll tax expense are both examples of operating expenses because they are necessary costs of employing workers. Purchases, on the other hand, may or may not be an operating expense depending on the context. If the purchases are for inventory or supplies that are necessary for the ongoing operations of the business, then they would be considered operating expenses. If the purchases are for equipment or assets that will be used for a longer period of time, then they would be classified as capital expenditures, not operating expenses.

Which of the Following Is an Operating Expense