Definition:An expense is the cost of an asset used by a company in its operations to produce revenues. In other words, an expense is the use of assets to create sales. Notice that I didn’t say it’s the amount of money spent to generate sales. Expenses are created when an asset is...
Often, accrued expenses must be estimated. What Is the Difference Between Accrued Expenses and Accounts Payable? Accrued expenses are expenses a company knows it must pay, but cannot do so because it has not yet been billed for them. The company accounts for these costs anyway so that the ma...
Administrative expenses are those that are incurred to allow a business to function. They don’t directly pay for the production of goods or services. They effectively allow a business to function so they’re unavoidable. They’re flexible, however, and can be tweaked when budget cuts are nece...
What Are Prepaid Expense Examples? Prepaid expense examples list down the expenditure done in advance for the benefits or facilities used by an entity or individuals. The most common examples of prepaid expenses include rent, equipment paid for before use, salaries, taxes, utility bills, interest ...
Miscellaneous expenses are not shown on the balance sheet, as they are not ongoing assets or liabilities to the company. Rather, they are reported during the period they’re incurred, impacting the entity’s bottom line. Examples of miscellaneous expenses Miscellaneous expenses are a broad categ...
What are Examples of Accounts Payable Expenses? AP encompasses any amount of money a company owes besides payroll, including goods or services purchased, software subscriptions, logistics, late fees, or office utility bills. While payroll is not included in AP, it appears on the balance sheet as...
Learn about what expenses are, and how they affect your business. Find out more accounting terms in the QuickBooks' Glossary.
What is included in operating expenses? Here are some common examples of operating expenses that businesses may incur: Salaries and wages: Compensation paid to employees, including regular salaries, wages, and benefits like healthcare, retirement contributions, and paid time off. Rent and utilities:...
Operating Expenses vs. Capital Expenses Do not use these two terms interchangeably – their meanings are different: Operating Expenses (OpEx) OpEx is for everyday needs. Examples include rent, electricity, or employee wages and bonuses. Capital Expenses (CapEx) CapEx refers to long-term investme...
That's not all. You'll also need to make sure your employees are reimbursed for personal costs incurred during the trip. Generally, you should cover or reimburse them for all business-related expenses, such as computer rental fees, dry cleaning, meal expenses, and incidental expenses. You'll...