Utilities Expense - water and electricity costs paid or payable to utility companiesĪnd others, such as Accounting or Bookkeeping Fees, Legal and Attorney Fees, etc.Įxpenses are deducted from revenues to arrive at the company's net income. Training and Development - costs for the enhancement of employee skills It is temporary because it lasts only for the accounting period. Telecommunications Expense - cost of using communication and telephony technologies such as mobile phones, land lines, and internet A temporary account is an income statement account, dividend account or drawings account. License Fees and Taxes - business taxes, registration, and licensing fees paid to the government Specific accounts may be in place such as Office Supplies Expense, Store Supplies Expense, and Service Supplies Expense. An expense account is an arrangement between an employer and an employee that allows the employee to spend the companys money on things relating to their. Supplies Expense - cost of supplies (ball pens, ink, paper, spare parts, etc.) used by the business. Salaries Expense - compensation to employees for their services to the company It is often coupled with traveling, hence the account title Travel and Representation Expense. Representation Expense - entertainment costs for customers, employees and owners. Repairs and Maintenance - cost of repairing and servicing certain assets such as building facilities, machinery, and equipment Rent Expense - cost paid or to be paid to a lessor for the right to use a commercial property such as an office space, a storeroom, a building, etc. Decrease in equity, other than distributions to equity participants - There are only two elements that decrease equity: distributions to owners (i.e., withdrawals or dividends) and expenses.It may also incur in a liability in cases of accrued expenses ( unpaid expenses). Besides cash, the company may also use other assets in paying expenses. Hence, expenses in accounting are the cost of doing. When a company incurs an expense, it pays cash thereby decreasing assets. Expenses in accounting are the money spent or costs incurred by a business in an effort to generate revenue. Decrease in assets or increase in liabilities - The decrease in economic benefits mentioned above could be in the form of a decrease in assets or an increase in liabilities.Decrease in benefits during the accounting period - Expenses are measured from period to period, and results in a decrease in economic benefits.Expenses Explainedįrom the technical definition of expense, we can draw the following points: Technically, expenses are "decreases in economic benefits during the accounting period in the form of decreases in assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants". ![]() ![]() Refer to costs incurred in conducting business.
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