Where should Rhonda put the administrative expenses for her business when she prepares the financial forecasts?
A)Administrative costs are subtracted from amount of sales.
B)In the operating expenses section
C)Administrative costs are included in cost of goods sold
D)In the interest expense section

Question

Quizplus · Accepted Answer

Administrative expenses should be included in the operating expenses section when preparing financial forecasts. This section is where expenses directly related to running the business are recorded, such as salaries, rent, utilities, and office supplies. Cost of goods sold refers to expenses directly related to producing the goods or services sold, while interest expenses reflect the cost of borrowing money to finance the business. Administrative expenses do not fall under either of these categories.

Where Should Rhonda Put the Administrative Expenses for Her Business