Operating Expenses
Operating expenses are the costs a business incurs as part of its regular business activities, not including the cost of goods sold. These costs include administrative expenses such as office supplies and salaries for administrative personnel. Commissions and advertising are examples of sales expenses. You also have general operating expenses such as rent and utilities.
Non-Operating Expenses
Some business expenditures are incurred for reasons that don’t involve normal business operations. One example of a non-operating expense is interest on borrowed money. Non-operating expenses also include one-time or unusual costs. The expenditure required for a business reorganization or to pay expenses due t a lawsuit are examples. Charges for obsolescence of equipment or currency exchange are also non-operating expenses.
