Question
Distinguish between operating expenses and disbursements for operating expenses. A. Operating expenses are only costs of facilities and services that are shared by users and
Distinguish between operating expenses and disbursements for operating expenses.
A. Operating expenses are only costs of facilities and services that are shared by users and are charged to the income statement in a particular period. All operating expenses are associated with the sales of the period, and others may be costs of being in business for the period. Disbursements for these operating expenses, that is, the cash payments for them, must be in the current period or a previous period.
B. Operating expenses are costs charged to the income statement in a particular period. Some operating expenses may be associated with the sales of the period, and others may be costs of being in business for the period. Disbursements for these operating expenses, that is, the cash payments for them, may come in a previous period or a future period, as well as during the period.
C. Operating expenses are costs that requires a future cash disbursement and are charged to the income statement in the current period. All operating expenses are associated with the costs of being in business for the period. Disbursements for these operating expenses, that is, the cash payments for them, must be in a future period.
D. Operating expenses are only costs that will continue even if an ongoing operation is changed or deleted. Operating expenses are charged to the income statement in a particular period and are associated with the costs for the period. Disbursements for these operating expenses, that is, the cash payments for them, must be in the current period or a future period.
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