Paying for oil, gas, maintenance, and repairs are all examples of which type of accounting expense?

• A. Capital expenditures
• B. Non-operating expenses
• C. Financing expenses
• D. Operating expenses

Answer: (D)

Verified step by step guidance

1. Understand the concept of operating expenses: These are costs incurred during the normal course of business operations, such as utilities, rent, salaries, and maintenance.
2. Analyze the nature of the expenses mentioned in the problem: Oil, gas, maintenance, and repairs are recurring costs necessary for the day-to-day functioning of a business.
3. Differentiate operating expenses from other types of expenses: Capital expenditures are investments in long-term assets, non-operating expenses are costs unrelated to core business activities, and financing expenses are related to borrowing or raising capital.
4. Recognize that the expenses listed (oil, gas, maintenance, and repairs) are directly tied to the ongoing operations of the business, making them operating expenses.
5. Conclude that the correct classification for these expenses is operating expenses, as they are essential for maintaining the business's regular operations.