What is an example of a non-operating expense?

What is an example of a non-operating expense?

• A. Salaries paid to employees
• B. Cost of raw materials
• C. Losses from the sale of investments
• D. Utility expenses

Answer: (C)

Non-operating expenses are costs that are not related to the primary business activities of a company. These expenses are typically associated with activities that are outside the regular operations of the business, such as financial activities or investment-related transactions. Losses from the sale of investments represent a non-operating expense because they arise from the sale of assets not directly related to the core business operations. For instance, if a company sells stocks or bonds at a loss, that loss is considered a non-operating expense since it does not pertain to the day-to-day functions of the company, such as producing goods or providing services. In contrast, salaries paid to employees, cost of raw materials, and utility expenses are all considered operating expenses. These costs are integral to the core operations of a business, as they directly relate to producing the company's products or delivering its services. Thus, they do not qualify as non-operating expenses.

Non-operating expenses are costs that are not related to the primary business activities of a company. These expenses are typically associated with activities that are outside the regular operations of the business, such as financial activities or investment-related transactions.

Losses from the sale of investments represent a non-operating expense because they arise from the sale of assets not directly related to the core business operations. For instance, if a company sells stocks or bonds at a loss, that loss is considered a non-operating expense since it does not pertain to the day-to-day functions of the company, such as producing goods or providing services.

In contrast, salaries paid to employees, cost of raw materials, and utility expenses are all considered operating expenses. These costs are integral to the core operations of a business, as they directly relate to producing the company's products or delivering its services. Thus, they do not qualify as non-operating expenses.