Date : 151
what is expence? Explain
with example
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Answer:
Costs that are matched with revenues on the income statement. For example, Cost of Goods Sold is an expense caused by Sales. Insurance Expense, Wages Expense, Advertising Expense, Interest Expense are expenses matched with the period of time in the heading of the income statement.
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Explanation:
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 used up, not when cash is paid out.
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