Question

Operating expenses include ________.

loss on sale of plant asset

cost of goods sold

expenses that occur in an entity's major line of business

cost of goods sold, selling expenses, and administrative expenses

Answer 1

Answer:

"Expenses that occur in an entity's major line of business" is the correct answer.

Operating expense- Are the expenses that are necessary for running the business. These incur due to normal course of business. These are not directly related to the production but indirectly related.

These include:

• Salary
• Rent
• Utilities
• Selling & Administration expenses

Notes: Option "cost of goods sold, selling expenses, and administrative expenses" can also be correct because some experts define COGS as Operating expense because COGS is recorded in the income statement as operating expense due to matching principle.