What describes selling, general, and administrative expenses as well as non-cash expenses?

Selling, general, and administrative expenses (SG&A) are classified as operating expenses, which encompass the costs associated with running a company's daily operations not directly tied to the production of goods or services. This category includes expenses related to sales, marketing, administration, and any other overhead costs necessary for maintaining business operations.

Non-cash expenses, like depreciation and amortization, also fall under the umbrella of operating expenses. These are considered in the overall assessment of an organization's financial performance but do not involve actual cash transactions in the current period. By recognizing both SG&A and non-cash expenses as operating expenses, companies can present a more comprehensive view of their operational efficiency and profitability.

In contrast, operating income reflects the earnings generated from the core business activities after accounting for operating expenses but does not directly describe the expenses themselves. Net income represents the total profit of the company after all expenses, taxes, and interests have been deducted, while cost of goods sold specifically relates to the direct costs tied to the production of goods sold by a company. Thus, referring to the combination of selling, general, and administrative expenses and non-cash expenses is accurately captured by the term operating expenses.