Where is truck insurance listed on an income statement?

• A. Cost of goods sold
• B. Administrative expenses
• C. Operating expenses
• D. Interest and financing

Answer: (C)

Truck insurance is an ongoing cost that supports the business as a whole, not a cost tied to producing a specific project. On an income statement, costs directly linked to delivering goods or services—like materials and labor used on a job—go into cost of goods sold. Vehicle insurance isn’t charged to a particular job, so it isn’t COGS. Instead, it’s part of operating expenses—the regular, ongoing costs of running the business. It could appear under general or administrative expenses in some formats, but the standard placement for vehicle insurance is within operating expenses. Financing costs like interest are shown separately under interest and financing.