Operating expenses is a term that many business use in their reports. It’s the line of costs that covers labor, transaction fees, and other company-related items. Operating expenses are sometimes also referred to as operating costs.
Operating expenses are the costs that are necessary for the company to carry out its business. Operating expenses include labor, rental, and other office-related expenses. To find out what these costs are, a company may look at its income statement.
Expenses will appear under income or expense. They are concerned with the expenses necessary for the company to carry out its business. For example, the company may rent an office or it may pay wages to a receptionist. It is important that working capital must be present in order for the company to operate.