Income Statement Operating Expenses are the costs associated with selling goods and services and running a business. These expenses include but are not limited to rent, utilities, insurance, payroll expenses, marketing expenses and other general administrative costs. Operating expenses are recorded on the income statement as expense accounts for each item of cost incurred. When these expenses are summed up for a period of time, they represent the total operating expenses for that period. The more expenses incurred, the lower the potential profits of a business – so it’s important to keep a close eye on your operating expenses!