Multiple choice

Which of the following is classified as an operating expense?

  1. Purchase of machinery

  2. Debenture interest

  3. Freight on sales

  4. Dividends payable on preference capital
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Operating expenses are costs incurred in the normal course of business operations. Freight on sales is a direct selling expense, whereas machinery purchase is a capital expenditure, and interest/dividends are financial expenses.

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