Non-operating expenses They are the expenses that not related to the operating of the business, e.g. They may include selling expenses and general and administrative expenses. Operating expenses They are the expenses that incur in operating of the business but are not related to the cost of goods sold. While the cost of goods sold is the cost of the purchase for a merchandising company, it may include the cost of raw material, labor, and overhead for a manufacturing company. Non-operating expenses Expenses Cost of goods sold It is the cost that directly ties to the goods that the company sells.They can be classified into 3 types including: Expenses are last one of the five elements of financial statements. ExpensesĮxpenses are the cost that the company incurs in running the business during a period of time. In this case, revenues are only recognized when the company delivers goods or provides services to the customers, regardless of when it receives cash. Under accrual-basis accounting, the company only records transactions in the periods in which the events occur. interest or dividend received from investments. Non-operating revenues They are the money earned from side activity that is not related to the main business’s activities, e.g.
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