Explanation

Total expenses refer to the operating costs a business incurs to run its daily activities. These are separate from the cost of buying inventory (which is part of Cost of Goods Sold).

From the given data, we identify three expense items: Salaries (₦1,500), Office expenses (₦1,100), and Other expenses (₦1,300).

Calculation: ₦1,500 + ₦1,100 + ₦1,300 = ₦3,900.

Important note: The “Reduction in doubtful debts” of ₦500 is not included here because it represents a recovery or reversal of a previous bad debt provision. When a provision is reduced, it is treated as income rather than an expense. Stock values and purchases are also excluded because they relate to Cost of Goods Sold, not operating expenses.