Multiple Choice
Secured loans are less costly than unsecured loans because:
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1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In operating a business, rent, salaries, supplies, utilities, and insurance are all examples of:
A
Operating expenses
B
Liabilities
C
Revenue
D
Capital expenditures
Verified step by step guidance1
Understand the concept of operating expenses: These are costs incurred during the normal functioning of a business, such as rent, salaries, supplies, utilities, and insurance. They are necessary for day-to-day operations but do not directly contribute to the production of goods or services.
Differentiate operating expenses from liabilities: Liabilities represent obligations or debts owed by the business, such as loans or accounts payable, and are not the same as operating expenses.
Compare operating expenses with revenue: Revenue refers to the income generated from the sale of goods or services, whereas operating expenses are costs incurred to maintain operations.
Distinguish operating expenses from capital expenditures: Capital expenditures are long-term investments in assets like equipment or property, which are not part of the regular operating costs.
Conclude that rent, salaries, supplies, utilities, and insurance are examples of operating expenses because they are recurring costs essential for running the business.
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