Operating and Non-operating Expenses & A closer look at their differences and similarities

Posted on Apr 8, 2013 | 0 comments

You might just be curious as to what on-operating expenses may be since operating expenses is quite self-explanatory: these are the expenses that your business incurs in order to properly run and operate the business. Now non-operating expenses in its simplest form are all the costs that the business has incurred in the performance of peripheral or incidental purposes. Telling them apart can be quite tricky especially in some areas but you’ll get the hang of it.

The following is a list of examples of non-operating expenses:

  • The repair of the machinery that you have bought for your business. The machinery is currently on rent since you don’t need it for running the business yet.
  • The salary of the caretaker of the space you have bought for your business but is now on lease since you are not yet planning to open up the new business.
  • Broker fees should you want to invest in the financial market through the use if the profit you have gained from your business.

Here on the other hand is your business’s operating expenses:

  • The rent of your office space.
  • The salary of your employees.
  • The cost of your equipments and machineries.
  • Office supplies.

If you think that the expense directly affects the operation of the business such as if you do not pay for the rent of your office space then there is no way you can continue working there  and if you do not pay for your office supplies the ease of work and administrative functions will be jeopardized then they are positively operating expenses. While if they could pose little to no effect to the business’s standard operating procedures like when you do not pay for the broker fees it would not affect the operation of your business then these expenses are your non-operating expenses.

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