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Preparation of Statement of Profit and Loss

Is amortisati...

Question

Is amortisation an operating expense?

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Solution

Yes, amortisation is regarded as an operating expense.

Also read:

True and False Questions on Depreciation

What Is Depreciation

MCQs on Depreciation

What Is a Fixed Asset

MCQs on Goodwill

Intangible Assets

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Q. Charles Ltd. earned a profit of ₹ 1,00,000 after charging depreciation of 20,000 on assets and a transfer to General Reserve of ₹ 30,000. Goodwill amortised was ₹ 7,000, and gain on sale of machinery was ₹ 3,000. Other information available is (changes in the value of Current Assets and Current Liabilities): trade receivables showed an increase of ₹ 3,000; trade payables an increase of ₹ 6,000; Prepaid expenses an increase of ₹ 200; and outstanding expenses a decrease of ₹ 2,000.
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Q. Revenue from operations = Rs 1,00,000
Finance cost = Rs 5,000
Cost of materials consumed = Rs 15,000
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Is a retailer's Interest Expense an operating expense or a non-operating expense?

Q. late cash from operating activity
Debtors 42000, 46000
pre-paid expense 2000 ,2700
Accrued income 1500, 1200
B/R 14000,12000
income received in advance 800,1000
B/P 13000,11000
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O/S expense 8000, 6000
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Q. ______ is (are) an example of operating expenses.

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