ADMINISTRATIVE EXPENSES Meaning and
Definition
-
Administrative expenses refer to the costs incurred by a business or organization in its day-to-day operations that are not directly tied to the production of goods or services. These expenses are typically associated with the administrative functions or support services required to run the company efficiently.
Examples of administrative expenses may include salaries and wages of administrative staff, rent or lease payments for office space, maintenance and utilities expenses, office supplies and equipment costs, insurance premiums, legal and professional fees, advertising, postage, travel expenses, and other general overhead expenses. These costs are crucial for maintaining the overall functioning of the organization and supporting its core operations.
Administrative expenses are often classified separately from other operating expenses, such as cost of goods sold or direct labor costs, as they do not directly contribute to the production process or the creation of the company's products or services. However, they are necessary to ensure the smooth operation of the business and provide essential support and infrastructure for the production processes to take place.
Monitoring and controlling administrative expenses is an important aspect of financial management, as excessive or inefficient administrative spending can affect the profitability and overall financial health of an organization. Proper management of administrative expenses involves optimizing resources, streamlining processes, and maintaining cost-effective methods to support the core functions of the business.
Common Misspellings for ADMINISTRATIVE EXPENSES
- zdministrative expenses
- sdministrative expenses
- wdministrative expenses
- qdministrative expenses
- asministrative expenses
- axministrative expenses
- acministrative expenses
- afministrative expenses
- arministrative expenses
- aeministrative expenses
- adninistrative expenses
- adkinistrative expenses
- adjinistrative expenses
- admunistrative expenses
- admjnistrative expenses
- admknistrative expenses
- admonistrative expenses
- adm9nistrative expenses
- adm8nistrative expenses
- admibistrative expenses
Etymology of ADMINISTRATIVE EXPENSES
The word "administrative" comes from the Latin word "administrativus", which is derived from the verb "administrare", meaning "to manage" or "to govern". The word "expenses" comes from the Latin word "expensum", which means "something spent".
When combined, "administrative expenses" refers to the costs associated with the management and operation of an organization or business. These expenses typically include salaries and wages of administrative staff, office supplies, utilities, maintenance costs, and other overhead expenses incurred in running the administrative functions of an entity.
Infographic
Add the infographic to your website:
