Business, Legal & Accounting Glossary

Definition: Expense


Quick Summary of Expense

An expense is caused by a transaction or event arising during the ordinary activities of the business which causes a decrease in the ownership interest.

What is the dictionary definition of Expense?

Dictionary Definition

n. in business accounting and business taxation, any current cost of operation, such as rent, utilities and payroll, as distinguished from capital expenditure for long-term property and equipment.

  1. A spending or consuming. Often specifically an act of disbursing or spending funds.
  2. That which is expended, laid out, or consumed. Sometimes with the notion of loss or damage to those on whom the expense falls.
  3. obsolete Loss.

Full Definition of Expense

An expenditure which is chargeable against revenue during an accounting period. An expense results in the reduction of an asset. All expenditures are not expenses. For example, a company buys a truck. It trades one asset – cash – to acquire another asset. An expenditure has occurred but no expense is recorded. Only as the truck is depreciated will an expense be recorded. The concept of expense as different from an expenditure is one reason financial reports do not show numbers that represent spendable cash. The distinction between an expenditure and an expense is important in understanding how accounting works and what financial reports mean. (To expense is a verb. It means to charge an expenditure against income when the expenditure occurs. The opposite is to capitalize.)

Synonyms For Expense

cost, expenditure, charge, price, expenses

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Expense. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
January 27, 2022 https://payrollheaven.com/define/expense/.
Chicago Manual of Style (CMS):
Expense. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/expense/ (accessed: January 27, 2022).
American Psychological Association (APA):
Expense. PayrollHeaven.com. Retrieved January 27, 2022
, from PayrollHeaven.com website: https://payrollheaven.com/define/expense/

Definition Sources

Definitions for Expense are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 28th April, 2020 | 7 Views.