Financial Statements – I · Class 11 · CBSE · Commerce Accountancy
Which of the following items is treated as an operating expense in the Profit and Loss Account?
Practice question from Financial Statements – I (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-C5E801
Which of the following items is treated as an operating expense in the Profit and Loss Account?
- A.Loss on sale of machinery
- B.Interest paid on long-term loan
- C.Office rent and salariesCorrect answer
- D.Preliminary expenses written off
Solution
Office rent and salaries are regular day-to-day business expenses incurred for running the enterprise, hence classified as operating expenses. Loss on sale and interest are non-operating items.
More from Financial Statements – I
- Which of the following is the primary objective of preparing financial statements according to the accounting principles?
- Gross Profit is best defined as:
- While preparing the Trading and Profit and Loss Account, Closing Stock is valued at:
- Which of the following errors will be disclosed by the preparation of a Trial Balance, but NOT by the preparation of Trading and Profit and…
Practise more Accountancy
Sign up free for adaptive practice on this chapter, with instant feedback and hints on every question.
Start practising freeFree to start · No credit card needed