operating expense
"Operating expenses" are vital costs that businesses incur to maintain their daily operations, distinct from costs related to asset purchases or upgrades.
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Definition
B2Business Operations
(general)Costs incurred for the daily running of a business, such as rent, salaries, and utilities.
Example
- Rent is a significant operating expense for many businesses.
- Operating expenses must be carefully managed to ensure profitability.
C1Accounting
(technical)Expenditures necessary for a company's regular activities, excluding capital expenditures.
Example
- The income statement includes operating expenses like office supplies and maintenance costs.
- Understanding operating expenses helps in assessing a company's efficiency.
Similar
Terms that have similar or relatively close meanings to "operating expense":