Which term refers to expenses incurred in the normal operation of a business?

• A. Overhead
• B. Revenue
• C. Cost Of Goods Sold
• D. Depreciation

Answer: (A)

Overhead covers the ongoing costs needed to run a business day to day that aren’t tied to producing a specific product. These are the regular, everyday expenses that keep operations going—things like rent, utilities, office staff salaries, and insurance. They’re incurred in normal operations regardless of how much product you make or sell. Revenue is money coming in, not an expense. Cost of Goods Sold are the direct costs associated with producing goods for sale, which are separate from general operating expenses. Depreciation is a specific accounting allocation for long-term assets and is typically treated as part of overhead, not the general term for everyday operating expenses. Hence, overhead is the best fit.