Expense

• Cost of Sales or Cost of Goods Sold


  Represents the value of inventories that have been sold during the accounting period
• Insurance Expense


  Represents the cost of insurance pertaining to the current accounting period
• Utilities Expense

  Represents the costs of utilities (electricity, water, telephone, internet, cable TV, etc) that have been used during the accounting period
• Supplies Expense

  Represents the cost of supplies that have been used during the period
• Interest Expense


  Represents the cost of borrowing money. It is the price that a lender charges a borrower for the use of the lender's money
• Term "payable"


  Connotes a liability
• Taxes and Licenses


  Represents the cost of business and local taxes required by the government for the conduct of business
• Losses


  Expenses which may or may not arise from the ordinary course of business activities
• Bad Debt Expense


  The amount of estimated losses from uncollectible accounts receivable during the period
• Miscellaneous Expense


  Represents various small expenditures which do not warrant separate presentations
• Freight-Out


  Represents the seller's costs of delivering goods to customers
• Term "receivable"


  Connotes an asset
• Term "incurred"


  Relates to expenses
• Term "earned"


  Relates to income
• Advertising Expense


  Represents the cost of promotional or marketing activities during the period
• Salaries Expense

  Represents the salaries earned by employees for the services they have rendered during the accounting period
• Rent Expense


  Represents the rentals that have been used up during the accounting period
• Expenses

  Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets
• Depreciation Expense


  The portion of the cost of a depreciable asset (ex. building or equipment) that has been allocated to the current accounting period
• Types of expenses

  • Cost of Sales or Cost of Goods Sold
  • Freight-Out
  • Salaries Expense
  • Rent Expense
  • Utilities Expense
  • Supplies Expense
  • Bad Debt Expense
  • Depreciation Expense
  • Advertising Expense
  • Insurance Expense
  • Taxes and Licenses
  • Transportation and Travel Expense
  • Interest Expense
  • Miscellaneous Expense
  • Losses
• Transportation and Travel Expense

  • Out-of-town travel costs of employees sent to seminars
• Term "prepaid"


  Connotes an asset
• Transportation and Travel Expense

  1. Transportation expenses represent the necessary and ordinary cost of employees getting from one workplace to another which are reimbursable by the business

  2. Travel expenses represent the costs incurred when travelling on business trips
• Term "unearned"


  Connotes a liability