Accounting glossary
What is operating expense?
The running costs that are not the goods themselves: rent, wages, utilities, insurance, software. On the P&L they sit below gross profit — the overhead the trade's margin has to carry.
Example
Rent, wages, insurance, utilities and software subscriptions are operating expenses: the cost of being open, regardless of what you sold.
They sit below gross profit on the P&L precisely because they do not move with sales the way cost of goods does.
In SeroBooks
Expense accounts in the chart, budgeted and compared in Budget vs Actual. Budget vs actual →
Nearby terms
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