What are expenses in accounting?

Expenses in accounting are the money spent or costs incurred by a business in an effort to generate revenue. Hence, expenses in accounting are the cost of doing business, including a sum of all the activities that will hopefully generate profit for you. Some of the varied ways in which expenses are defined in accounting are:

What is an example of an expense account?

As the expense account increases, the total equity of the company decreases. Some common examples of costs are employee salaries, advertising, rent, utilities, taxes, and supplies. All of these costs are reported on the income statement at the end of an accounting period.

What is a business expense?

An expense is the cost of operations that a company incurs to generate revenue. It is simply defined as the cost one is required to spend on obtaining something. As the popular saying goes, “it costs money to make money.” Common expenses include payments to suppliers, employee wages, factory leases, and equipment depreciation.