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Accounting & Tax vocabulary · Financial Statements

Expense

Meaning in accounting & tax, with examples

/ɪkˈspens/nounCore term

In accounting & tax, expense means: A cost a business has used up in a period to earn revenue, such as salaries, rent, electricity or advertising, which reduces profit.

In Turkish: gider, masraf

How it is used

Expenses are incurred, accrued and recognised in the income statement. As a verb, to expense something means to record it as a cost immediately instead of capitalising it as an asset.

Example sentences

  1. Office rent is our biggest fixed expense.

  2. Small tools under the threshold are expensed immediately, not capitalised.

Common collocations

  • operating expenses
  • incur an expense
  • accrued expenses
  • expense an item
  • travel expenses
  • revenueThe income a business earns from its normal activities, mainly from selling goods or services, before any costs or expenses are deducted.
  • income statementA financial statement that shows a company's revenue, expenses and resulting profit or loss over a period, such as a quarter or a year.
  • accrued expenseA cost that belongs to a period but has not yet been invoiced or paid, recorded as an expense and a liability so the period shows its true cost.
  • overheadThe ongoing costs of running a business that cannot be linked directly to one product or service, such as rent, utilities, office staff and IT.
  • expense claimA request an employee submits to get back money spent personally on business costs, such as travel or client meals, supported by receipts.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.