Expenses| what is expenses in accounting ?

Expenses

The costs incurred by a business or individual in the process of earning revenue.


In accounting, expenses refer to the costs incurred by a company or organization in order to generate revenue or carry out its operations. This can include a wide range of costs, such as salaries and wages, rent, utilities, supplies, and other costs associated with running a business.

Expenses are an important part of financial accounting, as they are used to calculate a company's net income or profit. Net income is calculated by subtracting a company's total expenses from its total revenue, and it provides an important measure of the company's financial health.

Expenses are typically categorized into different types, such as operating expenses, administrative expenses, and cost of goods sold. Each type of expense represents a different type of cost associated with running a business, and understanding these different types of expenses is important for financial planning and management.