Expenses (definition)
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An expense is an outflow of a company’s money or other assets to pay for a service or product needed to run the operation and generate revenue. On the balance sheet, an expense decreases assets and at the same time increases liabilities. Typical business expenses include salaries, costs of products or services sold, depreciation of assets and interest on money borrowed. Expenses comprise a key element on the income statement.
Revenue– expenses = net income
References
Pratt, Jamie. (2003).Financial Accounting in an Economic Context.New York: John Wiley& Sons.
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