Expense
1. The economic costs that a business incurs through its operations to earn revenue. In order to maximize profits, businesses must attempt to reduce expenses without also cutting into revenues. Because expenses are such an important indicator of a business's operations, there are specific accounting rules on expense recognition.
2. Money spent or costs incurred that are tax-deductible and reduce taxable income. Investopedia Says:
1. Expenses are the opposite of revenues. Examples of expenses include payments to suppliers, employee wages, factory leases and depreciation.
2. Tax authorities frequently have very specific regulations that allow people to deduct certain expenses if used for business-related activities. For example, a traveling salesperson is allowed to deduct traveling expenses (fuel expenses and car rental costs) as a business deduction, because those costs are an integral part of the job. Related Terms:
Capital Expenditure
Flexible Expense
Home Office Expense
Income
Income Statement
Net Income - NI
Prepaid Expense
Reimbursable Out-Of-Pocket Costs
Revenue
Selling, General, & Administrative Expenses-SG&A |