Which of the following is a non operating expense?
A. Salary of Managing Director
B. Depreciation
C. Advertisement expenditure
D. Interest on loan
Answer: Option A
This Question Belongs to Commerce >> Accounting
Join The Discussion
Comments (1)
Related Questions on Accounting
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The correct answer option is D. Interest on loan.Why the correct option is correctD. Interest on loan is classified as a non-operating expense because it stems from financing decisions rather than core daily operations. It represents the cost of borrowing capital, which sits below the operating income line on the income statement.Why the other options are incorrect❌ A. Salary of Managing Director: This is an operating expense under administrative overhead. Managing the company is a core part of day-to-day operations.❌ B. Depreciation: This is an operating expense that represents the wear and tear of a company's functional assets over time. While it is a non-cash expense, it remains directly tied to operational assets.❌ C. Advertisement expenditure: This is an operating expense classified under selling and marketing costs. Generating customer demand is an essential, regular operational activity.