Expense

An expense is the amount spent on activities that help a business to produce and sell goods or services to generate revenue. Expenses when incurred lead to a reduce in the value of assets in the organization. Expense accounts are usually debited based on the type of account.

For example, shipping or delivery charges paid for purchase and delivery of machinery to the organization falls under Expense. Any salary or wages paid to the employees operating them are also added under Expense.

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Related Terms

• Earnings Per Share (EPS)
• Equity