What is the Meaning & Definition of operating expenses
The concept of operating expenses refers to the necessary expenditure for the functioning of a company or an organization. These costs are the costs (of compensation) personnel, rent, maintenance and supply expenses, to name a few. In other words, operating expenses are those which are intended to maintain an asset in its existing condition or change it so that it can be able to function.
Operating costs can be divided into administrative costs (salaries, office services), financial interests, issuing cheques, sunk costs (costs having finally paid cannot be refunded or recovered by other means) and representation expenses (gifts, travel, accommodation, meals).
Operating expenses also bear the name of indirect costs. Indeed, although they correspond to expenses related to the operation of the undertaking, the costs are not investments (for the purchase of a machine, for example).
For information, in economic parlance, an investment (or investment) is capital that is placed to get profits later, requiring to deprive themselves of an immediate benefit and enjoy the fruits in the future.
Operating costs, on the other hand, relate to the functioning of a case. They therefore involve not to expect a profit in the term since their purpose is to help the livelihood of commercial activity (that is profitable and advantageous).
For example: If a company spends money for the purchase of five computers, it's an investment. On the other hand, the money it spends on a daily basis for ink cartridges, leaves, and electricity are part of operating costs.
Operating costs can be divided into administrative costs (salaries, office services), financial interests, issuing cheques, sunk costs (costs having finally paid cannot be refunded or recovered by other means) and representation expenses (gifts, travel, accommodation, meals).
Operating expenses also bear the name of indirect costs. Indeed, although they correspond to expenses related to the operation of the undertaking, the costs are not investments (for the purchase of a machine, for example).
For information, in economic parlance, an investment (or investment) is capital that is placed to get profits later, requiring to deprive themselves of an immediate benefit and enjoy the fruits in the future.
Operating costs, on the other hand, relate to the functioning of a case. They therefore involve not to expect a profit in the term since their purpose is to help the livelihood of commercial activity (that is profitable and advantageous).
For example: If a company spends money for the purchase of five computers, it's an investment. On the other hand, the money it spends on a daily basis for ink cartridges, leaves, and electricity are part of operating costs.