Which of the following items is not reported as an operating expense?

Debt service is correctly identified as the item that is not reported as an operating expense. In property management and real estate accounting, operating expenses refer to the costs associated with the day-to-day functioning of a property. These expenses typically include management fees, utilities, and insurance, all of which are essential for maintaining the property and keeping it operating smoothly.

Debt service, on the other hand, pertains to the payments made on any loans taken out for financing the property, such as principal and interest payments. While debt service is a crucial financial obligation for property owners, it is not classified as an operating expense because it does not directly relate to the management or operation of the property itself. Instead, it is considered a financing expense, reflecting the cost of borrowing funds for the investment in the property. Understanding this distinction is key in differentiating between various financial obligations related to property management.