What is an example of a regularly recurring or periodic expense in an organization?

Prepare for your HFMA CSAF test with flashcards and multiple choice questions. Every question includes hints and explanations to boost your understanding and help you succeed on exam day!

A regularly recurring or periodic expense is an ongoing cost that an organization expects to pay at regular intervals, typically monthly or annually. Utilities are a prime example of this type of expense since businesses need to pay for electricity, water, gas, and other utility services on a consistent basis to keep their operations running. These expenses are predictable and typically appear in the budget as a standard line item.

In contrast, investment returns, sales revenue, and asset depreciation do not fit this definition of a recurring expense. Investment returns can fluctuate and are not guaranteed, sales revenue varies based on business performance and market conditions, and asset depreciation is an accounting method used to allocate the cost of an asset over its useful life rather than a direct cash flow or outlay. Thus, utilities are the clearest example of a regularly occurring expense within the context provided.

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