In the provided examples, which item is categorized under Administrative Expenses?

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Multiple Choice

In the provided examples, which item is categorized under Administrative Expenses?

Administrative expenses are the costs of running the company’s general operations and office functions, not tied directly to producing or delivering goods. Rent of Office fits this category because it covers the space used for admin activities, keeping the business running rather than promoting sales or delivering products. The other items serve different roles: Advertising Expense is tied to selling and promoting products; Freight Out covers delivering goods to customers (a selling/distribution cost); and Depreciation Expense of the Store typically relates to the store’s selling activities. So Rent of Office is the item that belongs under Administrative Expenses.

Administrative expenses are the costs of running the company’s general operations and office functions, not tied directly to producing or delivering goods. Rent of Office fits this category because it covers the space used for admin activities, keeping the business running rather than promoting sales or delivering products. The other items serve different roles: Advertising Expense is tied to selling and promoting products; Freight Out covers delivering goods to customers (a selling/distribution cost); and Depreciation Expense of the Store typically relates to the store’s selling activities. So Rent of Office is the item that belongs under Administrative Expenses.

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