Losses from the sale of a company asset are considered which type of expense?

• A. Operating expenses
• B. Other expenses
• C. Interest expenses
• D. Cost of goods sold

Answer: (B)

When a company sells an asset for less than its book value, the loss is not part of normal operating activities. It represents a disposal event and is treated as a non-operating item. On the income statement this shows up under Other expenses, sometimes labeled as non-operating expenses or loss on sale of assets. This classification separates it from the regular costs of producing goods (cost of goods sold) and from ongoing operating expenses, and from interest costs tied to financing. If there were a gain on such a sale, it would appear under Other income rather than under operating expenses. So the loss from selling a company asset fits best with Other expenses.