Which is NOT a type of operating expense?

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Multiple Choice

Which is NOT a type of operating expense?

Explanation:
Operating expenses are the cash costs of running the property that affect day-to-day operations. Depreciation is a non-cash accounting allocation of the building’s cost over its useful life, not a current cash outlay, so it isn’t included when calculating net operating income. Property taxes, insurance, and maintenance involve actual cash payments and are part of operating expenses, while depreciation is handled separately for tax and financial reporting purposes.

Operating expenses are the cash costs of running the property that affect day-to-day operations. Depreciation is a non-cash accounting allocation of the building’s cost over its useful life, not a current cash outlay, so it isn’t included when calculating net operating income. Property taxes, insurance, and maintenance involve actual cash payments and are part of operating expenses, while depreciation is handled separately for tax and financial reporting purposes.

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