expense

  

Definition

Money spent or cost incurred in an organization's efforts to generate revenue, representing the cost of doing business.

Expenses may be in the form of actual cash payments (such as wages and salaries), a computed expired portion (depreciation) of an asset, or an amount taken out of earnings (such as bad debts). Expenses are summarized and charged in the income statement as deductions from the income before assessing income tax. Whereas all expenses are costs, not all costs (such as those incurred in acquisition of income generating assets) are expenses.

Use expense in a sentence

  • Even though hiring an attorney is an extra expense, it can ultimately prove cost-effective when compared to how much time and energy would be spent without legal help.

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