All of the following are true of operating expenses except:
A)Operating expenses are incurred for the purpose of producing revenue.
B)Operating expenses are subdivided into the classifications of component and trend.
C)The administrative expenses portion of operating expenses tends to remain constant from period to period.
D)Subdividing operating expenses into different classifications helps managers and investors evaluate different aspects of the company's operations.

Question

Quizplus · Accepted Answer

Operating expenses are not subdivided into the classifications of component and trend. This is not a commonly used method of categorizing operating expenses. Rather, operating expenses are commonly classified by their nature (such as rent, salaries, advertising) and by the function they support (such as selling, general and administrative expenses).

All of the Following Are True of Operating Expenses Except