Marvin is preparing one of the annual financial statements. Which of the following should be included in operating expenses?
A) Marketing-related expenses
B) The cost for independent dealers to prepare for the distribution of the product
C) Interest on all loans
D) Income taxes

Question

Quizplus · Accepted Answer

Operating expenses are the expenses incurred to maintain the day-to-day business activities. Marketing-related expenses, such as advertising, promotions, and public relations, are necessary to maintain operations and should be included in operating expenses. The cost for independent dealers to prepare for the distribution of the product can be classified as a selling expense. Interest on loans and income taxes are not considered operating expenses.

Marvin Is Preparing One of the Annual Financial Statements