Legal Definitions - operating expense

An operating expense is a cost incurred by a business to run its operations and produce output. It is a type of expense that is charged against revenue for a specific period. Examples of operating expenses include rent, utilities, salaries, and supplies.

For instance, if a company spends $10,000 on rent for its office space in a month, it is an operating expense. Similarly, if a business spends $5,000 on salaries for its employees in a month, it is also an operating expense.

Operating expenses are different from capital expenses, which are costs incurred by a business to provide long-term benefits. Capital expenses are not deductible, but they can be used for depreciation or amortization.

Overall, operating expenses are essential for a business to keep running and producing its goods or services.