Which of the following is typically considered an operating expense?

• A. Selling, general, and administrative expenses
• B. Interest expense
• C. Gains on disposal of assets
• D. Interest income

Answer: (A)

Operating expenses are the costs a business incurs in its normal course of running and delivering goods or services, i.e., the day-to-day costs that support operations. The group labeled as selling, general, and administrative expenses falls squarely into this category because it includes expenses like sales commissions, marketing, salaries of administrative staff, rent, and other overhead tied to running the business.

Interest expense comes from borrowing and financing, not from core operations, so it appears as a non-operating (financing) item. Gains on disposal of assets are outcomes of investing activities, not normal operations. Interest income is income from lending or investments, also not part of operating activities.

Thus, the selling, general, and administrative expenses are the typical operating expenses.