Which of the following is an example of Administrative Expenses?

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Multiple Choice

Which of the following is an example of Administrative Expenses?

Administrative expenses are the general overhead costs required to run the business, not tied to making or delivering a specific product. Salaries of employees fit this category when referring to payroll for office or management staff who support daily administration rather than a particular sale or production activity. Advertising, store depreciation, and freight out are linked to selling activities—advertising to promote sales, depreciation of the store as part of operating a retail space used to generate sales, and freight out as delivery costs to customers—so they are classified as selling expenses. Therefore, Salaries of Employees is the example of Administrative Expenses.

Administrative expenses are the general overhead costs required to run the business, not tied to making or delivering a specific product. Salaries of employees fit this category when referring to payroll for office or management staff who support daily administration rather than a particular sale or production activity. Advertising, store depreciation, and freight out are linked to selling activities—advertising to promote sales, depreciation of the store as part of operating a retail space used to generate sales, and freight out as delivery costs to customers—so they are classified as selling expenses. Therefore, Salaries of Employees is the example of Administrative Expenses.

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