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Operating Expense
An operating expense is a cost that supports an organization's activities during a reporting period.
An operating expense supports an organization's activities during a reporting period. Examples include administrative salaries and marketing costs.
Property operations example: review recurring service costs in the appropriate expense accounts and compare them with the operating budget. Keep the reporting period and account definitions consistent.
Source: U.S. SEC, Beginners' Guide to Financial Statements, Income Statements and Cash Flow Statements.
Frequently Asked Questions
Is an operating expense always a cash payment in the same period?
No. Income-statement expenses and cash movements can occur in different periods; financial statements also include noncash costs such as depreciation.
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