Which of the following expenses are not typically classified as operating expenses?

Explore NCEA Level 1 Accounting Exam preparation. Study with quizzes and multiple choice questions including hints and detailed explanations. Boost your confidence for the exam!

Operating expenses are the costs that a company incurs during its normal business operations, including expenses related to selling, general, and administrative functions. These expenses are essential for the day-to-day functioning of the business. The correct answer, capital investments, are not classified as operating expenses because they refer to expenses that are incurred to purchase fixed assets or long-term investments that will benefit the company for many years, rather than being consumed in the short term.

Capital investments usually involve the purchase of property, buildings, equipment, or technology that will be depreciated over time rather than expensed in the current period. This differentiates them from operating expenses, which are generally short-term costs necessary for the ongoing operation of the business. In contrast, office supplies, administrative salaries, and postage are all typical operating expenses, as they are regularly incurred and directly related to the operational activities of the business.

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